Reliance Jio Penalty Case: TRAI to Reply to DoT This Month

Sectoral regulator TRAI will "this month" send to the Telecom Ministry its clarification on Rs. 3,050 crores penalty it had sought from Airtel, Vodafone and Idea for denying call connectivity to newcomer Reliance Jio.

"No, we have not written to them (Department of Telecom) yet. But we will be writing soon... We will be responding certainly this month. It will happen very quickly," TRAI Chairman RS Sharma told PTI. He did not give further details.

The Telecom Department, on April 5, wrote to the Telecom Regulatory Authority of India (TRAI) asking it to give a "reconsidered opinion" on the penalty issue, and also outline the basis and provisions of law under which the said amount had been recommended by the regulator.

Sources familiar with the matter said that DoT, in its communication, has also asked the TRAI to provide information on the number of subscribers acquired by Reliance Jio during the testing phase (that is prior to its commercial launch).

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The incumbent operators and the Mukesh Ambani-led Reliance Jio clashed last year over the issue of call connectivity.

Jio cried foul that its customers were suffering from call failures as the incumbent operators were not giving it sufficient interconnect capacity. The operators, in turn, charged the newcomer of unleashing a "tsunami" of free traffic on their networks.

Interconnection enables mobile users to make calls to customers of other telecom networks and is, therefore, crucial for smooth functioning of mobile services.

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In October last year, TRAI recommended to the Telecom Department, the imposition of total penalty of Rs. 3,050 crores on the three incumbent operators Bharti Airtel, Vodafone and Idea Cellular for allegedly denying interconnectivity to the new entrant that led to deterioration in the quality of service.

As per TRAI's recommendation, the penalty for Airtel and Vodafone worked out to about Rs. 1,050 crores each, while in case of Idea Cellular stood at about Rs. 950 crores.

The regulator, in fact, had stopped short of recommending cancellation of their telecom licences saying it may lead to significant consumer inconvenience.

However, when the issue was placed before the Telecom Commission earlier this year, the highest policy-making body of the telecom department, it favoured referring the matter back to TRAI for a "reconsidered opinion".

The Telecom Commission asked DoT to seek clarification from TRAI on nearly a dozen points, including whether the stipulated 90-day period was given to the three telecom operators for providing point of interconnection to the newcomer.