NEW DELHI: The Digital Communications Commission (DCC) decided on Wednesday to back TRAI's decision to impose Rs 3,050 crore of penalties on Bharti Airtel and Vodafone Idea. The final decision on imposing the fines, however, will be taken by the government.
In its earlier meeting in June, the panel had approved the penalties but asked TRAI to revisit the quantum of fines taking into account the financial stress in the sector.
However, DCC Chairperson Aruna Sundararajan said on Wednesday that since TRAI has maintained its stance, the commission has decided to back the regulator after detailed discussions. "The DCC has decided to accept TRAI's recommendations on the penalties and recommend accordingly," she said.
In October 2016, TRAI had imposed penalties on Bharti Airtel, and then seperate entities Vodafone India and Idea Cellular, for not providing enough inter-connect points to new entrant Reliance Jio.
According to the regulator's findings, this had led to deterioration in Quality of Service (QoS) indicators. These fines, at Rs 50 crore per circle, accumulated to Rs 1,050 crore each for Bharti Airtel and Vodafone (21 circles each) and Rs 950 crore for Idea Cellular (19 circles). The recently merged Vodafone Idea is now liable to pay a cumulative Rs 2,000 crore.
If the DCC's recommendations backing TRAI are implemented, it will place a significant dent in the balance sheets of Bharti Airtel and Vodafone Idea, both of which have struggled to maintain margins in the midst of intense price wars and high capital expenditure requirements.
In FY19, Bharti Airtel recorded a 63 per cent drop in net profit, while Vodafone Idea posted a whopping Rs 14,571 crore net loss.