Airtel rejects USD109m fine as ‘baseless’

12 Jul 2013

India’s Department of Telecommunication (DoT) has issued Bharti Airtel an INR6.5 billion (USD108.6 million) penalty notice in relation to the cellco’s Subscriber Local Dialling (SLD) service, offered between 2002 and 2005. The Economic Times writes that the cellco had routed national and international calls to its subscribers as local calls, resulting in loss of revenues to the exchequer and to state-backed incumbent Bharat Sanchar Nigam Ltd (BSNL). Airtel was instructed to terminate the service in 2003, but continued for a further two years before ending the practice. Telecom minister Kapil Sibal approved the maximum penalty of INR500 million in each circle that the service was offered. The Economic Times cited unnamed sources as saying that the watchdog was imposing maximum penalties on telecom providers, regardless of the magnitude of the offence, out of fear that the regulator or its officials would face accusations of corruption if the fines are lower.

Airtel has threatened litigation in response, calling the penalty ‘baseless’ and ‘disproportionate’. Airtel claims that the service only generated a few hundred thousand rupees and that the DoT was aware of this fact. The cellco also claimed that the regulator had found the service to be customer friendly and in compliance with licence conditions. A statement from Airtel said: ‘Without as much as giving us a proper hearing the DoT has, after eight years, issued a demand notice of INR6.5 billion in complete disregard of the natural process of justice. We urge the DoT to set out a cogent policy on imposition of penalties so that the telecom companies can operate in a rational and transparent environment.’