Shares of Vodafone Idea tumbled nearly 4 per cent, while Bharti Airtel stocks declined 3 per cent after Digital Communications Commission (DCC) cleared imposing penalty on the telecom companies for not providing points of interconnection to Reliance Jio.
Weighed down by the development, share price of Vodafone Idea declined as much as 3.75 per cent to hit an intra-day low of Rs 12.03, after opening lower at Rs 12.45 against previous close level of Rs 12.51 on the BSE.
In a similar trend, shares of Bharti Airtel tumbled as much as 2.97 per cent in intra-day trade to Rs 342.10 apiece on the BSE. The stock opened marginally higher at Rs 355.55 against previous closing price of Rs 353.30.
DCC, the apex decision-making body of the telecom department, on Monday approved imposing penalty on Bharti Airtel and Vodafone Idea for denying interconnection facility to newcomer Reliance Jio Infocomm. However, the Commission has decided to take Trai's view on revising quantum of penalty given the financial stress in the telecom sector, news agency quoted an official source as saying.
In October 2016, the Telecom Regulatory Authority of India (Trai) had recommended imposing total penalty of Rs 3,050 crore on Airtel, Vodafone Idea for allegedly denying interconnectivity to RJio. The authority had imposed a penalty of Rs 1,050 crore each on Airtel and Vodafone and Rs 950 crore on Idea. Since Vodafone and Idea have merged their businesses, the new entity Vodafone Idea will have to pay Rs 2,000 crore.
TRAI's recommendation followed the Jio's complaint in 2016 that over 75 per cent of calls on its network were failing as its incumbent rivals were not releasing sufficient number of points of interconnection (PoIs).
Edited by Chitranjan Kumar