DCC may not back Trai penalty on telcos, may go for nominal sum

New Delhi, July 15 (IANS) The Digital Communications Commission is unlikely to back TRAI's recommendations of a Rs 3,050 crore cumulative penalty on the three telcos -- Airtel, Vodafone, Idea -- and may make it into a nominal sum, sources said.

Now that the Telecom Regulatory Authority of India (Trai) has stuck to its stand on not lowering the amount, the sources said the proposal may be reduced to a very nominal amount to be paid by these telcos just to set the precedent of discipline in the market for where consumer's quality of service is concerned.

The sources said the DCC had, in principle, has agreed to the penalty but the Trai was also told to review the amount as the sector is probably not in a position to incur further cost on a penalty due to financial conditions. But, as the regulator did not lower the amount, so the decision may be to go in for a nominal sum as the punitive action.

On June 17, the DCC, while approving the Trai proposal for imposing penalty on operators like Bharti Airtel, Vodafone and Idea for not providing sufficient points of interconnection to RJio in 2016 during its trial network period, had asked the regulator to consider revising the quantum as the sector is under a financial stress.

Officials say a fine of Rs 3,050 crore at this stage would be an additional burden on telecom industry.

While the telcos, facing a situation where the DCC accepts the fine recommended by Trai, would go the courts, adding to the cost of prolonged litigation to telecom sector's burden and that would be to no ones' benefit.

The DCC could try to offer a lighter penalty for India's older telcos but the telcos would move the court against the levy of any fine, opposing the very essence of justification of the penalty, a source in one of the telcos said.

Vodafone Idea and Bharti Airtel have been posting losses at their India businesses due to the lower pricing pressure triggered by the entry of Jio in September 2016.

Earlier in February, a seven-member internal committee of the DoT had rejected by Trai's recommendation to levy the penalty and left the final decision on the DCC. The Trai had recommended that a fine of Rs 50 crore be levied on Bharti Airtel and Vodafone each in 21 circles, while a similar amount be levied on Idea Cellular in 19 circles. Thus, the penalty for Bharti and Vodafone was Rs 1,050 each while for Idea it was Rs 950 crore.