Bharti Airtel Ltd. (532454.BY) on Thursday rejected a penalty notice from India's Department of Telecommunications as "baseless" and said it plans to seek legal action to appeal the hundred million-dollar fine.
"Bharti Airtel believes that the demand for penalty of 6.50 billion rupees ($109 million) is devoid of any merit and has no justification both on facts and in law," Bharti Airtel, India's largest company by revenue, said in a statement. "We are disappointed that the Department of Telecommunications...has thought it fit to issue such a baseless penalty order, leaving us with no choice, but to litigate."
The Department of Telecommunications had issued the penalty to Bharti in June for alleged violations of telecom licensing rules between 2002 and 2005. The government agency claims Bharti had allowed roaming subscribers to make calls at local rates instead of national long-distance tariffs.
The development reflects growing regulatory uncertainty for telecom operators in India, the second largest market in the world by users. Indian telecom companies face as much as 65.0 billion rupees ($1.09 billion) in penalties for alleged violations of licensing terms, according to industry estimates.
India is divided into 22 service areas, and each service area requires a separate license. Long-distance calls between two service areas attract higher charges than local telephone calls.
New Delhi-based Bharti said it had "fully satisfied" regulatory requirements at the time of the alleged violations, adding that the regulator had called the service "customer friendly and in compliance of the license conditions."
Bharti, about a third of which is owned by SingTel (Z74.SG), said it got about 1.6 million rupees as revenue from offering the service, which the telecom department was aware of. The regulator has after eight years issued a demand notice "in complete disregard of the natural process of justice," the statement said.
Officials at the Telecom Regulatory Authority of India and the telecom department couldn't be immediately reached for comment.
Bharti Airtel: India Telecom Department's INR6.50 Bln Fine 'Baseless' - WSJ.com
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"Bharti Airtel believes that the demand for penalty of 6.50 billion rupees ($109 million) is devoid of any merit and has no justification both on facts and in law," Bharti Airtel, India's largest company by revenue, said in a statement. "We are disappointed that the Department of Telecommunications...has thought it fit to issue such a baseless penalty order, leaving us with no choice, but to litigate."
The Department of Telecommunications had issued the penalty to Bharti in June for alleged violations of telecom licensing rules between 2002 and 2005. The government agency claims Bharti had allowed roaming subscribers to make calls at local rates instead of national long-distance tariffs.
The development reflects growing regulatory uncertainty for telecom operators in India, the second largest market in the world by users. Indian telecom companies face as much as 65.0 billion rupees ($1.09 billion) in penalties for alleged violations of licensing terms, according to industry estimates.
India is divided into 22 service areas, and each service area requires a separate license. Long-distance calls between two service areas attract higher charges than local telephone calls.
New Delhi-based Bharti said it had "fully satisfied" regulatory requirements at the time of the alleged violations, adding that the regulator had called the service "customer friendly and in compliance of the license conditions."
Bharti, about a third of which is owned by SingTel (Z74.SG), said it got about 1.6 million rupees as revenue from offering the service, which the telecom department was aware of. The regulator has after eight years issued a demand notice "in complete disregard of the natural process of justice," the statement said.
Officials at the Telecom Regulatory Authority of India and the telecom department couldn't be immediately reached for comment.
Bharti Airtel: India Telecom Department's INR6.50 Bln Fine 'Baseless' - WSJ.com
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