Indian regulator recommends $456 mln fine on telecoms firms

(Add comment from Airtel, source)

By Sankalp Phartiyal

MUMBAI, Oct (HKSE: 3366-OL.HK - news) 21 (Reuters) - India's telecoms regulator on Friday recommended the top three network operators be fined a combined 30.5 billion rupees ($455 million), saying they were denying new entrant Reliance Jio sufficient interconnection points.

Jio is part of Reliance Industries Ltd (BSE: RELIANCE.BO - news) , controlled by India's richest man, Mukesh Ambani. It began offering 4G services in September, triggering a war over network points that connect Jio customers with Bharti Airtel Ltd (BSE: BHARTIARTL.BO - news) , Vodafone Plc's India subsidiary and Idea Cellular Ltd (BSE: 532822.BO - news) .

Responding to Jio's complaints over the denial of points of interconnection (POI), the Telecom Regulatory Authority of India (TRAI) recommended a fine of 500 million rupees per telecom zone for each of the three operators.

Airtel and Vodafone India were fined for 21 zones each while Idea was fined for 19 zones. India has 22 telecoms zones or circles.

The denial of POI to Jio "appears to be with ulterior motive to stifle competition and is anti-consumer", TRAI said in a statement.

Reliance Jio did not respond to an email seeking comment while Vodafone and Idea declined comment.

"We are continuously augmenting the POIs provided to Reliance Jio and the pace of augmentation has been the fastest ever done by us," a spokesman for Airtel said.

"Further, we are in full compliance of the requirements of Grade of Service set by TRAI."

The federal government's Department of Telecom is expected to take up the issue of fines with the three telcos, and if a mutual arrangement is not arrived at the companies can seek legal recourse, a source familiar with the matter told Reuters.

($1 = 66.9126 Indian rupees) (Additional reporting by Promit Mukherjee; editing by David Clarke (Toronto: CKI.TO - news) /Ruth Pitchford)