Telecom companies, Vodafone Idea and Airtel are facing the prospect of having to pay a fine of Rs 3,050 crore following a decision by the Digital Communications Commission to uphold the 2016 order of the TRAI. The order was in response to a complaint filed by Reliance Jio Communications that these companies did not provide adequate interconnection ports at their end so that the calls from Jio customers to customers of these established players could be allowed to go through.
The total penalty imposed on all three carriers is Rs 3,050 crore, Rs 1,050 crore each on Airtel and Vodafone and Rs 950 crore on Idea. Now that the last two have merged to form Vodafone Idea, they will have to pay Rs 2,000 crore.
The TRAI order of 2016, calling the denial of ‘points of interconnection’ or PoIs illegal, was sent to the government for further action. The Department of Telecommunication then set up the Digital Communications Commission (DCC) to go into the issue and give its recommendation. The Commission was constituted with top officials drawn from the department of telecommunications (DoT), ministry of electronics and information technology (MeitY), NITI Aayog and the department of economic affairs.
This DCC has now given its conclusion in which it has concurred with the order of TRAI and said the telecom companies are liable to pay the fines. DCC had sent the issue back to TRAI for reconsideration but the telecom regulator stood firm on its 2016 order.
This will add to the suffering these companies are already undergoing with profits declining and debts increasing primarily due to the disruptive tariffs brought in by Jio in 2016. Jio offers free voice calls throughout India and the charges for internet data usage are highly competitive. The tariff war only resulted in Idea deciding to merge with Vodafone. But it left all three old players bleeding which they have not been able to arrest even now. This additional burden of a Rs 3,050 crore fine will only add to their miseries. The companies have already gone public regretting the decision of the DCC and said they reserve the right to use their legal rights to remedy.
The companies claim they had not violated any law and that they had submitted to TRAI sufficient documentary evidence to prove that the PoIs were indeed provided to Jio when they launched their service.