Vi penalty plea thrown out by Delhi High Court

Vi penalty plea thrown out by Delhi High Court

The Delhi High Court has rejected Vodafone Idea (Vi)’s attempt to challenge a fine issued by the regulator TRAI (Telecom Regulatory Authority of India) in late 2016.

In September 2016, now-market leader Reliance Jio Infocomm (Jio) entered the mobile market and gained immediate traction by providing services effectively for free to new sign-ups during its first six months of operation. However, those who switched to Jio’s network reported a high failure rate for calls to different networks.

Jio argued that this was because the incumbent operators had denied its network sufficient points of interconnection (PoIs), while its rivals countered that Jio’s decision to provide free services forced their hands, as their networks would be overloaded by both such a large volume of asymmetric calls.

TRAI sided with Jio, and recommended fining the incumbents INR500 million (USD6.0 million) per circle where Jio’s claim was found to be true. This was prior to the merger of Vodafone India and Idea Cellular, and given that the operators were respectively fined INR10.5 billion and INR9.5 billion, the merged unit still owes a combined penalty of INR20.0 billion.

Despite the severity of this punishment, TRAI initially considered the even more extreme measure of cancelling the licences of operators found guilty of blocking Jio from PoIs. The strength of the regulator’s reactions drew accusations of favouritism towards Jio, and indeed the newcomer managed to avoid intervention or punishment despite its disruptive techniques.

The Economic Times reports that in its legal challenge against the penalty, Vi argues that TRAI does not have the authority to impose such fines under the terms of current regulations, and called for the penalties to be annulled. The Delhi High Court has now dismissed this petition.


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