InvestorQ : Why has the government imposed a penalty of Rs.3000 crore on Bharti Airtel? How does this impact the stock price?
Anu Biswas made post

Why has the government imposed a penalty of Rs.3000 crore on Bharti Airtel? How does this impact the stock price?

Answer
user profile image
Neelam Naik answered.
1 year ago


This penalty has been imposed on Bharti Airtel and also on Vodafone Idea. This penalty pertains to a complaint filed by Reliance Jio against Bharti Airtel, Vodafone and Idea (Vodafone and Idea merged subsequently) because they did not permit seamless interconnectivity for calls originating from Reliance Jio. Currently, if a call originates from a net work (say Reliance Jio) and terminates at Bharti Airtel then Reliance Jio has to pay interconnect charges to Bharti for the same. However, Bharti cannot deny interconnectivity to calls originating from Reliance Jio and that is liable to punishment under the current Telecom Rules.

Reliance Jio had complained to the TRAI that Bharti and Vodafone Idea had deliberately blocked calls emanating from Reliance Jio in contravention of the rules. The telecom panel had found Bharti Airtel, Vodafone and Idea guilty of these practices and has imposed this penalty. Of course, this penalty will be subjected to Bharti and others also taking the legal route in response. For the short term to medium term, the impact of this penalty is likely to be negative and will be an overhang on the Bharti Airtel stock.