Telecom department can penalise companies for denying connectivity to Jio: AG

NEW DELHI: The government's top law officer has informed the Department of Telecommunications (DoT) that it was well within its powers to levy penalties on Bharti Airtel, Vodafone India and Idea Cellular as recommended by the telecom regulator for denying adequate connectivity to Reliance Jio Infocomm, a senior DoT official said.

“The AG (Attorney General) has said that it is within our powers to levy the penalties in spite of the Tripura High Court judgment,” the officer told ET.

The department sought AG Mukul Rohatgi’s opinion after the Telecom Regulatory Authority of India ( Trai) in October recommended penalties totaling Rs 3,050 crore on the top three players — Rs 1,050 crore each on Airtel and Vodafone and Rs 950 crore on Idea.

The act on part of the three telcos, the regulator said, was in breach of the licence conditions and hence attracted a penalty of Rs 50 crore per operator per circle where they violated the conditions.

However, the department was unsure if it held the power to process the recommendation. The Tripura High Court had in another case last year questioned the DoT’s authority to levy such penalties for breach of licence conditions.

The department has approached a division bench of the high court challenging the order. Sources told ET that the AG has opined that during the pendency of the case, it held the right to impose penalties. Bharti Airtel Chairman Sunil Mittal, when told about the AG’s opinion, said he was not aware of it.

“We will examine it,” he said on the sidelines of an event. The AG’s opinion comes also within a month of Vodafone challenging the regulator’s recommendation at the Delhi High Court.

The Tripura High Court made the ruling while setting aside an over Rs 339 crore penalty imposed by the DoT on Dishnet Wireless, for lapses in its subscriber verification process in the Northeast and Assam Circles.

The court ruled that the clause in the licence agreement allowing the DoT to impose penalty was opposed to public policy, ultra vires and against the statutory provisions as stated.

In its recommendation on the Reliance Jio issue, the telecom regulator had noted that denial of interconnection by the three operators to the newcomer had appeared to be with the ulterior motive to “stifle competition” and was “anti-consumer”.

The recommendation came in the wake of a complaint by Jio that over 75% of calls on its network were failing as the incumbents operators were not providing it with sufficient points of interconnect to complete calls.

In its petition filed in December, Vodafone sought quashing of the recommended penalty, calling Trai’s move “arbitrary and biased” and one which exceeded the sectoral watchdog‘s jurisdiction.