India panel approves $442 million fine for telecoms firms

A girl checks her mobile phone as she walks past the Bharti Airtel office building in Gurugram, previously known as Gurgaon, on the outskirts of New Delhi, India April 21, 2016. REUTERS/Adnan Abidi

MUMBAI (Reuters) - A government panel on Wednesday approved a combined penalty of 30.5 billion rupees ($442 million) on telecom operators Bharti Airtel and Vodafone Idea for not providing points of interconnection to Reliance Industries’ telecom unit Jio when it began operations in 2016, Indian media reported.

India’s telecom regulator in 2016 recommended the penalty against Bharti, and what were then Vodafone Group Plc’s India unit and Idea Cellular, saying the three denied points of interconnection to Jio, a move it termed as anti-consumer and aimed at stifling competition.

The country’s Digital Communications Commission on Wednesday backed the telecom watchdog’s recommendations, Indian media quoted Aruna Sundarajan, the panel chair and the top official in India’s Department of Telecom (DoT) as saying.

Both Vodafone Idea and Bharti criticised the decision.

“This issue pertaining to points of interconnection has been examined by the DoT, various parliamentary and judicial authorities with no case for any default established,” Vodafone Idea, India’s biggest wireless carrier said in a statement, adding, it will “explore all options, including seeking legal recourse” to protect company interests.

A spokesman for Bharti said the company was “extremely disappointed” and the decision would further burden the high stress in the telecom sector.

Bharti will approach the “appropriate forum” and has complete faith in the country’s judicial process, the company’s spokesman added.

Reliance Jio, built at a cost of over $30 billion by India’s richest man Mukesh Ambani, offered free services for months after its launch. That forced its three rivals - Bharti, Vodafone and Idea - to cut prices and accept lower profits as well as sparking a wave of consolidation in the sector.

($1 = 68.9295 Indian rupees)

Reporting by Sankalp Phartiyal; editing by David Evans