Rs 3,050 crore penalty on Bharti Airtel, Vodafone Idea: Three panelists didn’t approve fine

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Updated: July 30, 2019 11:07:44 AM

The decision of the Digital Communications Commission (DCC) at its meeting on July 24 to levy a cumulative penalty of Rs 3,050 crore on Bharti Airtel and Vodafone Idea for not providing points of interconnection to Reliance Jio in 2016 was not a unanimous one.

In October 2016, Trai had recommended that a fine of Rs 50 crore be levied on Bharti Airtel and Vodafone in 21 circles, while a similar amount be levied on Idea Cellular in 19 circles.

The decision of the Digital Communications Commission (DCC) at its meeting on July 24 to levy a cumulative penalty of Rs 3,050 crore on Bharti Airtel and Vodafone Idea for not providing points of interconnection to Reliance Jio in 2016 was not a unanimous one.

Sources who attended the meeting told FE that three members of the inter-ministerial panel, which is the highest decision-making body of the Department of Telecommunications, dissented, while four others voted in favour of the penalty.

Normally, the attempt at DCC meetings is to arrive at a unanimous decision after discussions and consultation, but on some issues where there are divergent opinions which are unbridgeable, decisions are taken based on the majority view.

The DCC, which was earlier known as the Telecom Commission, is an inter-ministerial panel which has three members from the DoT – the DoT secretary, who’s also the chairman, member-finance and member-technology. Representatives from other ministries include: the Department of Economic Affairs secretary, Department for Promotion of Industry and Internal Trade secretary, IT & electronics secretary, and CEO of NITI Aayog.

Two of the DCC members who did not agree with the move to levy the penalty were moved to other departments in a larger reshuffle of secretaries on July 24.

Earlier in February, a seven-member internal committee of the DoT had rejected by 4:3 the Telecom Regulatory Authority of India’s (Trai) recommendation to levy the penalty and had left the final decision to the DCC.

In October 2016, Trai had recommended that a fine of Rs 50 crore be levied on Bharti Airtel and Vodafone in 21 circles, while a similar amount be levied on Idea Cellular in 19 circles. Thus the penalty for Bharti and Vodafone was Rs 1,050 crore while for Idea it was Rs 950 crore.

Since August 2018, Vodafone and Idea have merged and christened Vodafone Idea.

The Trai had recommended fines after it had issued show cause notices to the three operators towards end-September 2016 after finding high level of congestion in their network leading to call failures made to and from Jio network beyond the permissible limits.

The three incumbent companies in their defence had said there was a 90-day period since the commercial launch of services by an operator for providing the demanded points of interconnect and they confirmed to this deadline. They said it was unfair of Trai to monitor congestion levels on a daily basis and recommend a fine. Ideally, it should have measured congestion on a monthly basis, where the results would have been different.

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