Idea says not violated norms in issuing points of interconnection to Reliance Jio

Idea Cellular Ltd, India’s third largest telco, on Tuesday said it had not violated any norms in issuing points of interconnection (PoIs) to rival Reliance Jio Infocomm Ltd for which the telecom regulator has proposed a penalty of Rs950 crore.

The Telecom Regulatory Authority of India (Trai) on Friday recommended penal action against the country’s top three telcos, to the extent of Rs50 crore per circle, for deliberately blocking calls made from Jio’s network.

The total penalty proposed to be levied on Bharti Airtel Ltd, Vodafone India Ltd and Idea is Rs3,050 crore.

The company management, in a post-earnings call with investors, said Idea had released at least 20 times the PoIs in the last one month as it did before Jio launched services in early September.

“There is no confusion in our mind that PoIs need to be given to all operators and we have gone out of our way for Jio,” Himanshu Kapania, managing director of Idea, said in the call.

“Idea is not violating any QoS (quality of service) norms. We have responded to the show-cause notice and we have a complete legal opinion of no violation,” he added.

In the conference call, the company management also said that while there has been no impact on the voice revenue front because of Jio’s entry, data revenues did take a hit.

The company said that it had increased capex guidance by almost four times to Rs8,000 crore for the fiscal year ending 31 March 2017 as it is actively expanding 3G and 4G coverage.

Idea spent a total of Rs2,000 crore towards capital expenditure in the second quarter of current financial year. “The capex should fall by next year and sharply decline in subsequent years,” Kapania said.

The company currently has 3G coverage in 13 circles and 4G coverage in 11 circles.

On Tuesday, shares of Idea Cellular fell 2.08% to close at Rs75.40, while the exchange’s benchmark Sensex shed 0.31% to 28,091.42 points.

IDEA Cellular Limited