Trai defends penalty on Airtel, Vodafone, Idea in Jio case

The Telecom Regulatory Authority of India (Trai) has defended its decision to impose Rs3,050-crore penalty on the country's three major telecom service providers - Airtel, Vodafone and Idea Cellular - for their alleged failure to provide adequate points of interconnect (PoIs) to newcomer Reliance Jio for completing phone calls.

Trai said the three incumbent operators "intentionally denied and delayed" provision of points of interconnect to Reliance Jio.

In a point-by-point response to queries raised by the Department of Telecommunications (DoT), Trai said the three incumbent operators "intentionally denied and delayed" provision of points of interconnect to Reliance Jio "only to restrict a new entrant...causing a lot of inconvenience to consumers".

Trai said after its intervention Bharti Airtel, Vodafone India and Idea provided points of interconnect (PoIs) at much shorter notices (in some 7 instances within 2-3 days) implying that they were capable of providing such PoIs without any delay.

Telecom licence holders are bound by licence conditions that make it obligatory on them to ensure "maintaining quality of service" and "a breach thereof is liable to be treated as breach of terms and conditions of the licence," the regulator pointed out.

It is incumbunt on tem law to ensure effective interconnection and quality of service to the consumers, Trai said, adding that non-compliance of terms and conditions of the licence warrants revocation of the licence.

"However, the Authority was mindful of the fact that revocation of the licence will entail significant consumer inconvenience and therefore in view of the larger public interest involved, the Authority recommended a penal action of Rs. 50 crore per circle," it said.

DoT had in February asked Trai to clarify on various issues pointed out by telecom operators, including the basis of which the penalty amount was calculated and the provision in the law that enabled it to do so.

Trai said there is no provision in the licence or regulations to deny/delay provisioning of PoIs during the test phase. "On the contrary, the testing cannot be completed unless sufficient PoIs are provided," it said.

On the submission of Airtel, Vodafone and Idea that 14 paisa per minute they get for completing a call from rival network was below cost, Trai said the present termination charge has been prescribed after a comprehensive consultation process.

"It fully recovers the cost incurred by the terminating service provider. Therefore, there is no question of loss to terminating service providers due to asymmetry in traffic with Reliance Jio," it said.

Trai contested DoT's contention that it should have waited before issuing show case notices to the incumbents for failing to provide PoIs, saying "when the Quality of Service parameters were so bad and millions of consumers were suffering due to blatant and wilful violation of the licence conditions and Trai's Regulations" it could not have waited.

On the issue of show-cause not mentioning the penalty amount and it finally recommending the penalty after examining the replies of the operators, Trai said non-mention of the potential penalty amount does not make the recommendations legally untenable in any manner.

Citing various submissions of Airtel, Vodafone and Idea, including the admission that the steps taken were insufficient to bring down the PoI congestion to the desired level, Trai said the three operators "appeared to have ulterior motive to stifle competition."

Trai's penalty on Airtel and Vodafone worked out to about Rs1,050 crore each, while for Idea Cellular it stood at about Rs950 crore.

The regulator said it had, in fact, stopped short of recommending cancellation of their telecom licences as it would have caused significant inconvenience to the public.