Airtel Says Will Respond to TRAI, DoT on Interconnect Penalty

Bharti Chairman Sunil Mittal today said the company will "respond" to TRAI as well as Department of Telecom on the penalty recommended by regulator on it for allegedly denying interconnectivity to newcomer Reliance Jio.

He also called for moderation in spectrum prices so as to ensure that enough resources are available for setting up telecom infrastructure which is vital for economic growth.

"We will respond to TRAI (telecom regulator) and DoT when the time comes," Mittal said on the sidelines of a GSMA event. "The company will do what needs to be done," he added, without elaborating.

Mittal said however that "Points of interconnect have been liberally given...points of interconnect is not an issue." In a setback to incumbent telecom operators, Telecom Regulatory Authority of India last week suggested a penalty of about Rs. 1,050 crores each on Airtel and Vodafone, and Rs. 950 crores in case of Idea Cellular.

In its recommendation to DoT, TRAI said it found the trio to be non-compliant with licence conditions and service quality norms given the high rate of call failures and congestion at interconnect points for Reliance Jio.

Announcing its second quarter results yesterday, Bharti Airtel, which is India's largest mobile operator, had said that mobile business had experienced a slowdown in growth due to free services being offered by a new operator (Reliance Jio).

"When something out there in the market is free and it's being consumed, obviously data growth in that sense will taper off for a period of time...let us wait till December...that is the time we need to assess...after that a couple of quarters ...to see how it settles down," Mittal today said.

Asked if the company was facing competitive pressures because of the launch of Reliance Jio's 4G services, Mittal said "competitive pressures in this industry have been there for 20 years".

Earlier while speaking at the opening session of GSMA conference 'Mobile 360', Mittal called for moderation of spectrum prices. "We would like to see some of the spectrum prices being more moderated. As an industry, we believe this vital resource is better utilised out on the radio base stations than staying with the government and other government users. Because it has a multiplier effect, it can move the economy, and create momentum in the economy," he said.

In the recently-concluded spectrum auction, the debt- ridden telecom sector had ignored premium radiowaves in 700MHz band - which was put up for sale for the first time - at a reserve or base price of Rs. 11,485 crores per MHz.

Industry bodies like GSMA have urged Indian Government to reconsider the pricing for 700MHz band, which failed to attract buyers due to its "unrealistically" high pricing.