A pedestrian talks on a mobile phone in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

TRAI Recommends Penalty On Three Telecom Firms For Denying Jio Interconnection

India’s telecom regulator has recommended a penalty of Rs 50 crore per circle on three major telecom companies Bharti Airtel Ltd., Idea Cellular Ltd., and Vodafone after finding them guilty of not providing adequate points of interconnection to the latest entrant in the telecom industry – Mukesh Ambani-led Reliance Jio Infocomm Ltd. The recommendation has been made to the department of telecom (DoT) which will now have to take a final call in the matter.

In three separate letters to Airtel, Vodafone and Idea, the regulator said these companies are "in non-compliance of the terms and condition of licence and denial of Inter-connection to Jio appears to be with ulterior motive to stifle competition and is anti-consumer.''

Non-compliance of terms and conditions of the licence, under Section of 11(1)(a)(iii) of the TRAI Act, 1997 warrants recommendations for revocation of the licence. However, the authority is mindful of the fact that revocation of licence will entail significant consumer inconvenience.
TRAI’s letter to Airtel, Idea, and Bharti
TRAI Recommends Penalty On Three Telecom Firms For Denying Jio Interconnection

Rajeev Chandrasekhar, member of parliament, told BloombergQuint he supports TRAI’s recommendations on imposing penalty on incumbent telecom operators.

The regulator has sent a strong signal saying that rules cannot be ignored when you don’t like them. There is an Interconnect regulation and operators are duty bound to provide interconnect. If they do not want to provide that interconnect they should appeal in court but they can’t misuse their market power and say we don’t like the regulation that applies to us today by for the last 15 years we followed it and now we don’t like it. That is not how the rule of law works.  
Rajeev Chandrasekhar, Member of Parliament, Rajya Sabha

Points of interconnection have been a bone of contention in the battle between the incumbents and Reliance Jio. The latter has maintained that its consumers were experiencing massive call failures due to inadequate PoIs while the incumbents maintain that they have been providing sufficient interconnection to the Ambani-led firm.

The regulator had sought data on call failures at interconnection points between September 15-19. After analysing the data, the TRAI had issued showcause notices to these companies. As per the regulator’s quality of service norms, not more than 0.5 percent of calls made can fail at the points of interconnection.

Points of interconnection help consumers across different networks to connect to each other.

Rajan Mathew, director general of Cellular Operators Association of India, says this is the matter between incumbent operators and regulator, but expressed disappointment on the penalty imposed on the cellular operators.

We are disappointed. The penalties which are levied and the quantum of penalties is quite high. Anytime there is a penalty on the industry we are disappointed. From an association perspective, this is a matter between incumbent operators and TRAI and we do not get involved in bilateral agreements or individual matters or between individual companies and the regulator. We had asked for certain clarifications from the regulator and we got that. Now we leave it to the individuals.
Rajan Mathew, Director General, COAI

Idea Cellular declined to comment on the TRAI’s recommendation, when contacted by BloombergQuint.

Airtel in an emailed response said, “We are continuously augmenting the PoIs provided to Reliance Jio and the pace of augmentation has been the fastest ever done by us. Further, we are in full compliance of the requirements of Grade of Service set by TRAI.”

Vodafone is yet to respond to BloombergQuint’s request for a comment.