Vodafone India contesting Matrix Cellular allegations over SIM renting case

Telecom operator Vodafone has contested allegations levelled on it by international SIM card provider Matrix Cellular that the telecom major misrepresented facts in SIM renting case of 2007 in which Department of Telecom and Intelligence Bureau found various irregularities.

"The allegations made by Matrix are without merit and will be strongly contested, as appropriate," Vodafone India's spokesperson told PTI in response to e-mail query. In 2007, DoT had found involvement of Vodafone, Airtel and Idea in a case where the three had sold bulk connections to third parties who in turn were selling those SIM cards to retail subscribers and in the process flouted certain rules. The Department is also learnt to be in process of issuing fresh show cause notice to these companies.

DoT says it has found Vodafone and Matrix Cellular entered into one such agreement, but Vodafone, before the telecom tribunal TDSAT, had contested "that it had no knowledge of the purported activities of 'Matrix' so far as giving on rental the SIM cards issued to it is concerned."

Matrix has alleged that Vodafone misrepresented facts to DoT and TDSAT. "Matrix believes that Vodafone has misrepresented facts to the DoT and TDSAT. The business that Matrix engaged in was at all times legal and with the express, written consent of Vodafone", it had said last week.

DoT's monitoring cell in July 2007 found that 10,145 bulk postpaid connections were working in name of the company, Matrix Cellular Services Pvt Ltd (MCSPL). During the course of investigation, the DoT cell analysed

that out of 10,145 Bulk connection issued in name and address of MCSPL, only 836 mobile numbers were reported by Matrix to it and no information about 9,309 mobile connections were provided.

The DoT cell also saw it as serious threat to security of the nation. The department in its fresh show cause notice is likely to seek explanation from the three companies as to why it should not initiate action against them to either terminate their licence or impose the maximum penalty of Rs. 50 crore on each of them in Delhi service area.

DoT had earlier issued demand notice of Rs. 50 crore to these companies in November 2011 but they approached TDSAT against the notice. Telecom tribunal TDSAT in its order on the matter on July 17, 2012 said: "Petitioners may be served again with a show cause notice. They must file their respective show causes within two weeks from the date of receipt thereof."

DoT is also looking at the option to challenge the TDSAT order before the Supreme Court, according to sources.