TDSAT dismisses Reliance Infocomm plea

Today’s TDSAT judgement throws up questions over Telecom Regulatory Authority of India’s (Trai) access deficit charge (ADC) regime, which has now been shown to be susceptible to abuse and theft. But the judicial confirmation of this should be no surprise for Trai. The reason is that the telecom regulator has noted in almost every single consultation paper and order on the ADC issue that it itself believes that the regime that it has put in place gives arbitrage opportunity given the difference in the termination charge for international calls. These rates have ranged between Rs 5 and the current Rs 3.25. For local calls, the rate is 30 paise.

Essentially, the regime itself encourages people to illegally terminate international calls by masking the caller line identification (CLI) as local. Trai had also set up a Special Committee in mid-2003, whose report in August that year confirmed that illegal rerouting of ILD calls not only causes loss to the exchequer and adversely affects telecom development, but is also a national security risk — reaffirmed by the TDSAT judgment.

The matter has been hotly debated in Parliament with Left leaders like Nilotpal Basu alleging criminal connivance of Trai for putting a faulty regime in place and abdicating their duty wherein ADC is concerned. This matter was also forwarded to the Prime Minister. Reports of an enquiry by the PM on Trai’s role and its unwillingness to address the issue have snowballed into a raging controversy.

The TDSAT judgement has serious implications for the BSNL and MTNL cases too — pending in the Delhi High Court — regarding rerouting of ILD calls by Reliance Infocomm. BSNL has made claims amounting to Rs 263.40 crore and MTNL worth Rs 341.28 crore from Reliance on account of illegal rerouting of calls. These claims have been made alleging violation of interconnect agreements by BSNL and MTNL during 24 May, 2004 to 16 September, 2004.

Both the PSUs have claimed this money relates to call data records pertaining to 7,52,31,022 international minutes, which were allegedly rerouted by Reliance Infocomm illegally as local minutes. Of this, the total claim amounts to Rs 604.68 crore. Reliance has been directed by the court to pay, and has consequently paid Rs 182.70 crore to BSNL and Rs 111.80 crore to MTNL. The Rs 150 crore fine levied by DoT was related to this matter, but on breach of license agreements and Trai regulation.

The fact that TDSAT has given a finding upholding DoT’s showcause notice will have a major impact on the BSNL/MTNL case, as it relates to the same issue of illegally rerouting ILD calls to avoid payment of ADC.