Trai suggests Rs 3,000-crore fine on incumbents

In a setback to incumbent mobile operators, the Telecom Regulatory Authority of India (Trai) has proposed a penalty of about Rs 3,050 crore on three telcos — Bharti Airtel, Vodafone and Idea Cellular — for failing to provide sufficient interconnect points to Reliance Jio, leading to massive call failures.In a letter to the Department of Telecommunications (DoT) secretary, Trai has recommended a penalty of

Rs 50 crore per circle for 21 service areas, except Jammu & Kashmir, for Airtel and Vodafone, where the point of interconnect (PoI) congestion exceeded the permissible limit of 0.5 per cent. For Idea Cellular, the penalty has been suggested for 19 circles, except Himachal Pradesh, J&K and North East. The penalty for Airtel and Vodafone works out to about Rs 1,050 crore each, while in case of Idea Cellular it is about Rs 950 crore.

The regulator stopped short of recommending cancellation of incumbents’ licences, saying it may lead to “significant consumer inconvenience”. The recommendation came on complaint by Jio that over 75 per cent of calls on its network were failing as incumbents were not giving sufficient PoIs that would help complete calls. Trai said the action of the three incumbent operators was “against public interest”.

Trai said denial of interconnection by these operators to Jio “appears to be with the ulterior motive to stifle competition and is anti-consumer”. Trai went to the extent of saying that the non-compliance of licence terms “warrants” recommendations for revocation of licence. 

“However, the authority is 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 recommends a penal action of Rs 50 crore per LSA (circle)…,” it noted. The incumbents, however, have claimed they have provided sufficient PoIs to Jio.

Commenting on Trai action, an Airtel spokesperson 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.”

On October 7, Trai had directed all operators to submit a compliance report on QoS norms as congestion at PoIs was resulting in large-scale failure of inter-operator calls. Jio had claimed the incumbents were not offering enough PoIs. According to sources, the incumbents have said they have provided enough PoIs to Jio but the latter has not activated them, leading to call failures. Jio, which launched its services last month, is offering free voice calls and 4G mobile broadband services till December 31.

On October 12, Jio wrote fresh letters to the incumbents, seeking more PoIs. In June, Jio had sought PoIs for estimated 22 million subscribers. Subsequently, for September 2016, December 2016 and March 2017 POIs have been sought for estimated 50 million, 75 million and 100 million subscribers, respectively.

“It may be noted that the demand for E1s based on 50 mn subscribers, scheduled for September 2016, is already past overdue,” Jio said. The company further said unless its demand for interconnect points was met, the current PoI congestion levels will unabatedly continue to be much higher than the permissible limits. According to QoS rules, not more than five out of every 1,000 calls should fail.

Bhavin Turakhia, founder of calling app Ringo said, “Trai action against telcos is positive news for not just newer entrants like Ringo, but also bodes well for the entire industry and consumers at large as it will encourage more innovation in telecom and ensure compliance.” “We have been facing similar issues with Ringo, and we are sure the regulator will take the necessary steps to ensure compliance,” Turakhia added.