Trai imposes penalties of up to ₹1 crore per circle for interconnect delays

The Telecom Regulatory Authority of India (Trai) on Tuesday notified penalties of up to ₹1 crore per circle or service area for telecom operators that deny or delay providing interconnection, entering into interconnection agreements, or disconnecting or surrendering points of interconnect, as such violations may have a direct and significant impact on operators and the proper functioning of the interconnection framework.

In its third amendment to the Telecommunication Interconnection Regulations, Trai has notified lower financial disincentives or penalties for violating reporting requirements. Interconnection refers to arrangements between telecom operators for exchanging voice and internet traffic, enabling users of one service provider to connect to the network of another. The technical, operational and commercial arrangements are at the back end and are not visible to end mobile phone users.

“The Authority has also considered that a fixed financial disincentive, irrespective of the duration of the contravention, may not adequately distinguish between a short delay and continued non-compliance. Therefore, a graded financial disincentive has been prescribed, with a lower rate for delay up to fifteen days and a higher rate where the delay continues beyond fifteen days. The higher rate for prolonged delay is intended to encourage service providers to take timely corrective action and ensure compliance at the earliest,” the regulator said.

Trai has prescribed a penalty of ₹50,000 per day for the first 15 days and ₹1 lakh per day for each day beyond 15 days, with an overall ceiling of ₹25 lakh per service area for each instance of a reporting violation.

For violating regulations related to providing timely interconnection and other related provisions, a penalty of ₹1 lakh per day for up to 15 days has been prescribed, which rises to ₹2 lakh per day after 15 days. The penalty has been capped at ₹1 crore per service area per instance.

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The payments have to be made within 21 days or as specified. The regulations, along with the financial penalties laid down, will come into effect from January 1, 2027.

Among other changes, Trai has mandated shifting existing interconnection arrangements to Internet Protocol (IP)-based interconnections within three years from January 2027. IP-based interconnection will be mandatory for all new telecom connections. This is aimed at modernising network infrastructure and improving call quality, as well as reducing call drops. Interconnection arrangements will also have to shift from the Long Distance Charging Area (LDCA) and Short Distance Charging Area (SDCA) levels to the Licensed Service Area (LSA) level, at a graded pace.

Under the prevailing regulations, the service provider requesting an interconnection agreement is required to furnish a bank guarantee for six months from the establishment of the initial interconnection, if demanded by the other provider. Trai has said that the bank guarantee and its amount will continue to be provided by service providers only if demanded by the other service provider.