VODAFONE ESSAR CELLULAR.LTD Vs BHARAT SANCHAR NIGAM LTD. & ANR

A letter dated 5.2.2011 issued by the Respondent herein addressed to the Petitioner asking it to pay port charges purported to be for PCM connectivity in respect of 51 ports at the rate of 13,60,000/- + (N-32)20,000 amounting to Rs.17,40,000/- as also set up charges at the rate of 10,000/- per PCM is the subject matter of this petition. At the outset we may place on record that levying of the set up charges for PCM connectivity is, however, not in dispute. 2. The parties have entered into an interconnect agreement in terms of the conditions of license by the Government of India as also the directions issued by the Telecom Regulatory Authority of India (TRAI). 3. Petitioner with a view to carry on its business has set up exchanges at Rajender Nagar and Eastern Court. It had taken ports from the Respondent. E1s are connected with the Gateway Mobile Switch Centre (GMSC of the Respondent) located at Okhla and Chandralok. 4. Petitioner intended to change its mobile switching center manufactured by Siemens to one manufactured by Ericsson. Indisputably, for the said purpose it was necessary for it to undertake the job of testing and shifting of the new equipments. It is also not in dispute that the said process was required to be undergone by all the operators including MTNL, another public sector organization. 5. No other operator levied any charge on the Petitioner therefor. Respondent, however, by reason of its impugned letter levied charges, inter alia, on the premise that shifting to a new equipment would be deemed to be surrender thereof and that port charges will have to be paid for the entire year. 6. Questioning the said contention of the Respondent this petition has been filed praying, inter alia, for the following reliefs:

“(a) Quash and set aside the demand notes bearing Nos. DN/NTRDL/VEMSL_CMTS/0211/0034 and DN/NTRDL/VEMSL_CMTS/ 0211/ 0035 both dated 01.02.2011; (b)Restrain the Respondent from seeking any further charges apart from the Set UP charges as provided in the Interconnect Agreement and the Addendas executed between the parties for the change of GMSC equipment by the Petitioner; (c) Direct the Respondent to pay on reciprocal basis set up/actual costs incurred by the Petitioner for implementating the request of the Respondent for changes in the equipment/exchange locations carried out by the Respondent; (d) Pass an ad-interim ex parte order staying the operation of impugned demand notes bearing Nos.DN/NTRDL/VEMSL_CMTS/0211/ 0034 and DN/NTRDL/VEMSL_CMTS/0211/0035 both dated 05.02.2011 and direct the Respondent to allow the request of the Petitioner for change of Siemens GMSC to Ericsson GMSC without insisting on payment of the such demand;

7. Respondent in its reply, however, took a new stand that for the aforementioned purpose it was required to augment its resources by actually setting up new points of interconnect and thus the same will come within the purview of the circular letter dated 3.3.2009. 8. In its rejoinder to the said reply the Petitioner contended that the resources of the Respondent need not be augmented as the shifting process can be completed in one go and/or in phases. It was furthermore denied or disputed that such shifting would amount to a deemed surrender as equipments have a shelf life or may go out of order. It has furthermore been contended that in fact, the Respondent itself has taken recourse thereto on various occasions. 9. Before proceeding further in the matter we may place on record that the Respondent has filed an additional affidavit to which the Petitioner has filed a reply. 10. The parties hereto have not adduced any oral evidence on the merit of the matter; the core question being as to whether for carrying out the aforementioned activity, the Respondent is required to bear any additional expenditure. 11. The interconnect agreement had been entered into by and between the parties hereto on or about 19.12.2003. An Addenda was inserted later on. The technical issues pertaining to interconnection are dealt with in Chapter II of the said agreement.

12. As technical feasibility is said to be the concern of the Respondent herein, we may notice some of the provisions of the said interconnect agreement:

2.1.1 As per clause 2.6 of License agreement The LICENSEE (UASL) will have to make his own arrangements for the entire infrastructure required for providing the SERVICE. Therefore the UASL may develop its own independent network with its own transmission links within each of its service area. 2.1.2 The UASL shall be responsible for providing the required transmission links from/to his network to/from BSNL’s network at interface points under Clause 2.1.1, at local/tandem and TAX levels, initially as well as for augmentation from time to time. 2.1.11 The UASL’s network may have interconnectivity with BSNL’s network subject to technical feasibility of POI and integrity of network. Decision to declare POI as technically non-feasible shall be taken by Head of the Metro District of BSNL i.e. CGM or his nominated officer. Feasibility shall include technical characteristic, availability of ports for interconnection taking into account the BSNL’s own requirements and pending demand of various telecom service providers. Both BSNL and UASL will nominate suitable officers at BSNL Corporate Office and BSNL Metro District Headquarters for liasoning the interconnection issues.

13. The interconnect capacity contained in Chapter III being `capacity ordering’ may also be noticed:

“3.1 CAPACITY ORDERING

3.1.1 Demands/Forecasts of UASL, on BSNL for the following shall be firmed up at least 12 months* before the date on which the required connectivity or circuits is/are required.

i) Number of ports (2048 kb/sec digital trunks) and type of signaling GMSC wise for fully mobile network/telephone exchange’s location-wise for basic service network. ii) Addition to the traffic capacity of the MSCs for fully mobile network/exchanges for basic service in Erlangs. iii) Route wise expected traffic dispersion if possible. * Provided that this time frame shall be six months for demand made for the first occasion in the first year of License period. However, this does not preclude the possibility of earlier provisioning of the interconnect capacity in full or in part subject to technical feasibility and availability.

3.1.2 The requirements mentioned in Para 3.1.1 shall be furnished in the prescribed proforma given in the Annexure 2. 3.1.3 As stated in clause 2.1.1 and 6.1.1, UASL is responsible for providing the required transmission links to and from BSNL’s network at permitted interface points at TAX levels initially as well as for augmentation from time to time. However, in case UASL requests BSNL in writing to provide for such links, to interconnect UASL’s network to BSNL’s network, then BSNL, may accept such request and set up the link upon payment of charges as prescribed by BSNL from time to time. 3.1.4 BSNL on receiving the interconnect capacity demand shall normally intimate, within a period of 15 days and maximum of 30 days from the date of receipt of appropriate demand, either the acceptance or otherwise an alternative proposal for meeting this demand. In case no response is made within 30 days, it will be treated as accepted demand and interconnection seeker shall be free to deposit the prescribed amount for the required number of ports. 3.1.5 After the acceptance of interconnect capacity demand, in full or part, BSNL will issue a bill based on the accepted interconnect capacity demand, calculated as per Clause 6.3.2, within 30 days to the UASL for the advance charges for the first year’s use of connection. The UASL shall pay such bill within 30 days of the date of issue of bill failing which, BSNL will not be obliged to provide the interconnect capacity.

3.1.6 The above stated interconnect capacity demand will be treated as firm demand from the date of receipt of the first year’s advance payment of the port charges. The advance payment thus received by the BSNL from the UASL will be adjusted against the first year’s (reckoned from the date of actual provision of connection to the UASL) port charges for the connections, calculated as per Para 6.3.2. In subsequent years, the annual connection charges for the link connections will be paid each year in advance by the UASL.”

14. The time scale with regard to capacity ready for testing is twelve months. The matters relating to removal and cessation of inter connect capacity is contained in Clause 3.5.2. It reads as under:

3.5.2 If UASL required the removal of, in part or in full, interconnect capacity already provided under this agreement then an order (in short “removal order”) shall be placed on the BSNL to that effect. BSNL will in turn verify the requirement and remove the capacity within 30 days (or mutually agreed time frame) from the date of receipt of the removal order.

3.7 ENHANCEMENT OF STANDARDS AND FEATURES

3.7.1 If any change in BSNL’s / UASL’s network/system is introduced to comply with international standards and national standards or for any other reason mutually agreed to, costs associated with such changes that either party has to make in its network/system to maintain interconnectivity with other’s network shall be borne by the respective parties.”

15. Clause 6.11 provides for the interconnection charges. In terms of the interconnect agreement, the Petitioner is the interconnection seeker. The matter relating to port charges is contained in Clause 6.3.2 of the said agreement being as under:

6.3.2 PORT CHARGES

Annual interconnect port Demand for No. of charge per PCM PCMs from the UASL termination (excluding the S.No. as accepted by BSNL cost of infrastructure viz In an exchange on land, Building, air-each occasion conditioning etc) (In Rupees) 1 1 to 16 PCMs N*55,000 2 17 to 32 PCMs 8,80,000 + (N-16)*30,000 13,60,000 + (N- 3 33 to 64 PCMs 32)*20,000

20,00,000 + (N- 4 65 to 128 PCMs 64)*15,000 29,60,000 + (N- 5 129 to 256 PCMs 128)*14,000

Note: ‘N’ above refers to the number of ‘ports’ demanded by the Interconnection Seeker within the capacity ranges under the column ‘No. of Ports’.

16. Clause 8.2 provides for termination of the said agreement in the following terms:

“8.2 Termination

8.2.1 This Agreement shall continue for the period indicated in Clause 8.1 above unless any of the following events occur: (a)Either Party ceases to hold a licence under Section 4 of the Indian Telegraph Act. (b)An order is entered by a court of competent jurisdiction mandating the winding-up or dissolution of a Party, or appointing a receiver or liquidator for such Party or having a comparable effect;

(c)If in the interest of national security or otherwise, it is ordered by a Competent Authority such as Licensor/ TRAI, that the agreement may be terminated.

(d) If there is a breach of any of the technical and financial obligations as covered in clauses 2.1.3, 2.1.5.1, 2.1.8, 2.1.9.1, 2.1.9.2, 2.5, 2.11 and 6.4.6.

In which case this Agreement shall immediately be terminated, without any further notice.”

17. With the aforementioned backdrops, we may notice the factual matrix involved herein: A. Petitioner by a letter dated 24.1.2011 requested the Respondent herein that necessary instructions be issued with regard to its migration from Siemens GMSC2 installed in its exchanges to Ericsson GMSC1 (SPC 11305). B. It is admitted that the number of ports involved was to be 63 plus 2. By reason of another letter dated 23.3.2011 the Petitioner requested the Respondent not to levy any surrender charge for the captioned E1s in response whereto. Only on 10.5.2011 referring to its circular letter dated 7.1.2011 the latter raised its demand stating only on receipt of the payment; process for commissioning of new POI would be completed. The circular letter dated 7.1.2011 to which reference has been made in the said letter reads as under: “Please refer to your office letter No.7- 116/NTR/NC/POI-NGNSWITCH/2008-09 dated 28.12.2010 received from GM(NC) on the above subject vide which clarifications have been sought in relation to request of M/s Reliance Communications for migration/shifting of POI from one GMSC to another GMSC since both switches are TDM based. 2. In this regard, it is clarified that instructions contained in this office letter to even number dated

3.3.2009 are applicable in all cases wherein private operators request for shifting of POIs from their one switch to their other switch, irrespective of the type of switch. Further since E1s being surrendered from old switch were immediately being utilized for providing same number of E1s at new switch, it was clarified, vide this office letter dated 3.3.2009 that additional charges for one year are not to be recovered for surrendered E1s. However, as port charges are taken by BSNL, on annual basis and there is no provision for monthly charging of port charges, therefore in such cases the annual port charges of surrendered E1s already available with BSNL (till 31st March) may not be refunded/adjusted in the Demand note of shifted new POI.”

C. Another circular letter of the Respondent on which, reliance has been placed is dated 3.3.2009. It reads as under: “Please refer to your letter No. GM-CH/R- 12/Genl/II/164 dated 11/2/2009 received from CMM, NTD Chandigarh in the above subject vide which clarifications have been sought from this office whether migration of E1s from existing TDM switches of private operators to their new NGN switches is allowed or private operators may be asked to establish now POIs with new switches. It has also been requested to intimate whether AT be done involving T&D staff as third member or by local team members of OLO and BSNL TAX staff. 2. In this regard, it is clarified that the shifting of E1 from the existing switch (i.e. TDM switch) to the new switch (NGN switch) of private operators is to be treated as surrender of E1s from old POI and provisioning of E1 at the new POI. 3. Accordingly, requisite charges such as set-up cost, port charges etc for the new POIs are to be recovered from private operators as per the provisions of Interconnect Agreement. Further charges for surrender of working E1s ports from the old POI are to be recovered as per instructions issued vide this Office Letter No.114-1/2004-Regln dated 30.09.2005. However, additional charges for one year are not to be recovered as E1s being surrendered from the old POI shall be fully utilized for providing the same number of E1 at the new POI.”

The circular issued earlier by BSNL, however, was not made part of the interconnect agreement as would appear from Addenda II dated 11.10.2010; the relevant clauses whereof are as under: “(4) The UASL shall ensure that its interconnect facilities delivered at each point of interconnection (POI) conform to the applicable quality of service (QOS) standards and technical specifications for interconnection by the relevant delivery date determined pursuant to the provisions of this Agreement. (5) UASL shall be responsible to provide, install, test, make operational and maintain all interconnection facilities on its side of point of interconnection (POI) unless otherwise mutually agreed.”

D. Petitioner, with a view to demonstrate that the Respondent itself has migrated to other equipments in the town of Kolkatta has drawn our attention to a district specification dated 10.5.2010; the relevant portions whereof are as under: “Sub: connectivity testing between BSNL Cellular Network (CTD CellOne GMSC at Chittaranjan) and Networks of Private Service Providers connected in CTD MSC-5 for shifting of POI Connectivity in CTD CellOne GMSC at Chittaranjan.

Competent Authority of Calcutta Telephones had been decided to shift enmass POI connectivity with OLOs from CTD MSC-5 at TBZ to Chittaranjan CellOne GMSC. This shifting is necessary for the interest of BSNL. The competent Authority of Calcutta Telephones has also been approved for waiving off Shifting Charges and additional lease line charges from OLOs. Accordingly, in Chittaranjan GMSC following POL connectivities are to be established and POI testing is to be conducted. SI. Name of the operator TG name No. TG name at Type of media NO at MSC-5 of Chittaranjan E1 GMSC 14 Vodafone Essar East HUTKOL 90 VODMK1 Vodafone media Ltd. ( CMSP) 15 Vodafone Essar East VODKO2 15 VODMK2 Vodafone Media Ltd. (CMSP) 16 Vodafone Essar South ILVODA 5 ILVODI BSNL lease line Ltd. (ILDO) 17 Vodafone Essar South VODMWB 25 VODMWB BSNL lease line Ltd. (CMSP) Total No of E1 324

DGM (TM) is requested to allot E1 Slots from CellOne GMSC at Chittaranjan to the Other Service Providers as mentioned above. Very Important: For conducting above POI connectivity test at least one E1 per trunk group is to be extended. After successful commissioning of new connectivity with Chittaranjan GMSC all existing E1 are to be shifted from MSC-5 to Chittaranjan GMSC. During testing all call scenario should be tested. Income calls on the circuit groups should be accessed for BSNL CTD Cellular subscribers only and transiting to any other network would be barred by CellOne GMSC at Chittaranjan. Detail Billing (CDR) should be involved for both Outgoing as well as Incoming Traffic.”

D. It has been contended that the total time taken in shifting of about 300 POIs was only one week. E. Another example given in this behalf was shifting of equipments in the Ambala Cantt Exchange of the Respondent, where Vodafone Cellular had about 50 POIs and the target date therefor by reason of a circular dated 5.3.2010 was fixed on 12.3.2010. Yet another example given was in respect of Ambala Cantt Exchange itself whereby also similar decommissioning was to be done as would appear from a letter dated 9.5.2011. F. We may also notice the statements made in paragraph 22 of the petition wherein a reference has been made to the aforementioned circular letter dated 5.3.2010: “22. That in fact, even in cases where the location of the switch itself is changed from one premise or locality to another, the entire cost of establishing the new POI interconnectivity is borne by the Petitioner. Only as an example of such unreasonableness, the Petitioner is annexing herewith as ANNEXURE P-15 a communication dated 10.05.2010 from the Kolkata Circle office of the Respondent wherein they ordered shifting of BSNL POIs from one location to another i.e., from CTD, MSC-5 at TBZ to Chittaranjan Cellone GMSC and the Petitioners were forced to set up the infrastructure without any reimbursement of costs. Other such similar communications dated 05.03.2010, 21.04.2010 and 09.05.2011 in this regard is annexed hereto and is marked as ANNEXURE P-16, P-17 AND P-18 respectively.”

Reply thereto by the Respondent is as under:

“Contents of para 22 are denied to the extent they do not form part of the record. It is respectfully submitted that it is evidently clear from letter dated 10.5.2010 that for the said shifting of POIs shifting charges and additional lease line charges were waived off. It is respectfully submitted that the Respondent relies upon the submissions made herein above. It is respectfully submitted that shifting POI from one point to another is only done in terms of the Interconnect Agreement as stated herein above.”

18. As far as the Petitioner’s contention that such a request on its part for migration to another type of equipment, no charge was levied by the MTNL is concerned, Respondent considered the same to be irrelevant. 19. Respondent, however, would contend that having regard to definition of “point of interconnection” as contained in interconnect agreement, the Petitioner being a signal seeker it would be wrong to confine the matter only to the interconnect agreement. 20. According to it the migration from one equipment to another is permissible only when: (i) augmentation of resources is carried out; (ii) quality of signal is maintained; and (iii) in the event the shifting is to take place in one go, the quality cannot be maintained as mandated by the TRAI in its Regulations. 21. It is also relevant to notice at this stage the contentions raised by the Respondent in its additional affidavit:

“5. It is respectfully submitted that on the trunk group working between GMSC (spc=9110) of Vodafone and Eastern Court TAX, the maximum traffic was 1319.3 Erlang (on 11.09.2011), while the Petitioner has taken the traffic of 1091.05 Erlang (on 16.09.2011). Similar is the case of other trunk groups working between GMSCs of Vodafone and TAXs of BSNL. The following table provides the actual figures and that used by the Petitioner.

S GMSC of Type TAX of Actual Traffic Trunk Actual Vodafone of BSNL Maximum used by justifi Trunks Traffic traffic with Vodafone ed for required in date in its maxi comparison calculation mum to those s/ charts traffic taken into account by Vodafone in calculations/ charts 1 GMSC NLD Rajinder 1160 826 1207 146% (spc= Nagar Erlangs Erlangs 9110) (11.09.11) (16.09.11) 2 GMSC NLD Eastern 1319 1091 1368 125% (spc=9110) Court Erlangs Erlangs (11.09.11) (16.09.11) 3 GMSC NLD Rajinder 793 Erlands 660 835 127% (spc=9005) Nagar (18.09.11) Erlangs (16.0911) 4 GMSC NLD Eastern 1144 1075 1191 108% (spc=9005) Court Erlangs Erlangs (29.09.11) (16.09.11) 5. GMSC ILD Eastern 23.2 19.98 35 175% (spc= Court Erlangs Erlangs 9005) (09.09.11) (16.09.11) 6. GMSC ILD Rajinder 25.5 20.73 38 183% Erlangs (spc=9110) Nagar Erlangs (07.09.11) (16.09.11)

6. It is respectfully submitted that as is evident from the above table, the Petitioner is showing very less traffic in comparison to actual traffic in order to justify its wrong stand.

7. In rejoinder the Petitioner has completely taken a U-turn inter-alia, alleging that it is only asking for shifting of 51 E1s only and the shifting can take place without any augmentation at the end of BSNL by re-routing the traffic to the remaining 63 E1s at Rajinder Nagar Level 1 TAX. Similarly, as per Petitioner, for the Eastern Court Level 1 TAX, the shifting would be way of the said process only and the POI utilization at Rajinder Nagar Level 1 TAX by TAX by result of re-routing of traffic would be about 77% and at Eastern Court level- 1 TAX would be about 100%. In support of its submissions, the Petitioner has placed on record charts showing the flow of traffic at various POIs and had tried to support its case. 8. It is relevant to note that even as per the calculations of the Petitioner by taking very less traffic than the actual traffic, for Eastern Court Level 1 TAX the Petitioner had very conveniently stated that POI utilization would be approximately 100% when to the Petitioner’s own knowledge and documents, the utilization would be more than 114.30% which is way above the 100% utilization. 9 It is submitted that as per calculations of BSNL, even as per the process of the Petitioner, the POI utilization at the Rajinder Nagar TAX after removing 51 E1s would be of 101% whereas Petitioner has shown only 77%. Similarly, for Eastern Court TAX it would be 136% after 63 E1s as proposed by the Petitioner, whereas the Petitioner has shown only 100%.

10 It is respectfully submitted that as per the report of BSNL and as per norms of telecom networks, even both the existing POIs working between GMSC (spc=9100) of Vodafone and Eastern Court and Rajinder Nagar TAX of BSNL needs augmentation as these are having utilization of 72.5% and 77.5% respectively.

22. The reply thereto by the Petitioner is as under: “The Respondent has filed the additional affidavit under reply to refute the submission of the Petitioner; however, even a bare reading of its affidavit would show that the present highest traffic utilization at the Point of Interconnect is ranging between 77.2% and 72.3% at POI working between GMSC (SPC=9110) of Vodafone and Rajender Nagar and Eastern Court TAX of BSNL. Therefore, even going by the case of the Respondent, the equipment can be easily changed by shifting the E1s, if not at one go, in stages. 5. That the fallacious nature of the submission made by the Respondent in its additional affidavit is highlighted by the fact that the Respondent also regularly makes requests for shifting of the Points of Interconnect and in fact, between the period of July, 2009 to June, 2011 it has made larger number of such requests, as detailed in Annexure-P19 at Page 53 of the paper book. In fact, as an example, the Respondent had made a request for change of POIs from its MSC Shahibaug to NGN GMSC Shahibag at Ahmedabad. At that time 126 E1s did exist at the POI The switch A/T (Acceptance Testing) was carried out in 2 days on 11.02.2011 (FRIDAY) and 14.02.2011 (MONDAY). The testing of 10 E1s was carried out one at a time. Out of 126E1s, 10 E1s were taken out at a time from traffic for the purpose of A/T. The POI utilization each time when 10 E1s were being tested was 91.11%. The traffic was 3511.01 erlangs. There was no disruption of service. The Petitioner did not create additional capacity in its GMSC for the purpose of the shifting of the POI of BSNL nor was this treated as a case of surrender or POI augmentation. “

23. Respondent has filed the aforementioned additional affidavit for all intent and purport as a sur-rejoinder to the rejoinder. It was furthermore stated: “3. That at the outset I submit that the defence raised by the Respondent is totally incorrect and fallacious. In order to justify its impugned demand it has been submitted by the Respondent that it would have to create additional capacity augmentation in order to meet the request to the Petitioner regarding change of GMSC equipment from that of Siemens of Ericsson. This is totally incorrect. It is submitted that at present the Petitioner has 114 E1s connected to Rajender Nagar Level 1 tax. Out of this only 51 E1s will be shifted to the new equipment as per the request made to the Respondent. The balance 63 E1s will continue to work as at present. Traffic will be shifted from Siemens GMSC2 (9110) to GMSC1 (9005) Pol with over flow on EC TAX and GMSC1 Pol utilization would be 77% (approx.). Simultaneously, these 51E1s will be connected with New Ericson GMSC1 (11305) and after getting commissioning letter from BSNL, traffic will be routed on New Ericsson GMSC1 from existing Siemens GMSC1 (9005). 4. That similarly, there are 126 E1s connected to Eastern Court Level 1 TAX. Out of this only 61 E1s will be shifted to the New Ericsson GMSC1. Traffic will be shifted from Siemens GMSC2 (9110) to GMSC1 (9005) Pol with over flow on RN TAX and GMSC1 Pol utilization would be 100% (approx.). Simultaneously, these 61 E1s will be connected with New Ericsson GMSC1(11305) and after getting commissioning letter from BSNL, traffic will be routed on New Ericsson GMSC1 from existing Siemens GMSC1(9005).”

24. The questions which would, thus, arise for our consideration are:

(i) In absence of any provision for shifting of any POI in the interconnect agreement would it be deemed to be a surrender of POI and grant of a new POI? (ii) Was it possible for the Respondent to carry out the shifting without augmenting its resources ? (iii) Would it necessary for the parties that for the said purposes the traffic capacity at 50% extra should be maintained? 25. We have heard learned counsel for the parties at great length having regard to the nature of controversy between them namely as to whether it is technically feasible (although according to the Respondent it was impossible) to shift without augmenting the resources of the Respondent. 26. The parties thereafter met on two occasions i.e. 7.12.2011 and 17.12.2011. We may notice the Minutes of Meeting dated 7.12.2011. 1 “Vodafone has proposed shifting of 51 E1 of BSNL’s Rajender Nagar D-Tax 1 from Vodafone’s Siemens GMSC II(SP 9110) to Ericsson GMSC ( SP 11305). It said that first one E1 may be shifted from its Siemens GMSC to the Ericsson GMSC and after testing of 1 E1, the whole POI can be shifted in one go. Similarly this can be done for Eastern court TAX POI also. By following this method, no augmentation of capacity is required to be done by BSNL in their switches.

BSNL team said that the testing is required for every E1 not for the single E1. So it is not possible to shift the POI in one go as testing and CDR comparison takes as per AT guidelines.

2. The traffic figures of September 2011 were discussed in the meeting in the case of Rajender Nagar POI where 51 E1 are working at present. Second proposal of M/s Vodafone team is that after meeting the requirements of Grade of service, 11 E1s are spare and these are available to be taken out for the purpose of testing by BSNL. Similarly in case of Eastern Court TAX where 61 E1s are working, 16 E1s can be taken out for testing by BSNL. In this method, the testing can be carried out in stages by BSNL. In this method also there is no need to augment the capacity of TAXs by BSNL.

BSNL Team said that Vodafone team considered no flexibility and has taken neck to neck traffic while calculating the spare E1s. In case of any failure of existing E1s or due to spurt in traffic the quality of service will be degraded. Moreover the Vodafone team did not consider 50% extra circuit for these calculations. The request submitted by Vodafone is in one go and accordingly demand note has been issued for shifting of all E1s to new switch of Vodafone.

3. Vodafone said the figures of peak traffic for the month of September 2011 have been taken into account in above paragraph. The peak traffic occurs between 7 pm to 8 pm in evening. The lean hours of traffic commences from midnight to 5 pm. So the testing can be done in daytime also, when traffic is much lower than peak hour traffic.

The BSNL team said the testing is done by T&D circle of BSNL and after completion of testing, CDR of tested calls are collected from both operators (BSNL & Vodafone). T & D circle compares the CDR and submits the report to BSNL. Accordingly after submission of records, the POI can be commissioned

During this period the tested E1s are kept as block. This exercise can not be completed in one day only.

Therefore BSNL side suggested that taking into requirement of M/s Vodafone there is only way to carry out the work of making additional ports link between Eastern Court to new Ericsson GMSC of Vodafone by way of augmentation.”

27. On a suggestion made by the learned counsel for the parties by an order dated 23.12.2011, it was directed:

“This Petition was to be disposed of in terms of the pleadings and the affidavits filed by the parties. No oral evidence has been adduced.

The matter was heard on 29.11.2011 and 30.11.2011.

On 30.11.2011 on a question as to whether shifting of POIs is technically feasible without augmentation of the resources of the Respondent, it was accepted by learned counsel for the parties that their respective technical experts may meet to consider as to whether such shifting of POIs either in one go or phases is possible by reason whereof the Respondent would not be required to augment its resources. The technical experts of the parties met 7.12.2011 and 17.12.2011. A minute of meeting was drawn up in respect of the meeting date 17.12.2011. The matter was listed before this Tribunal on 9.12.2011 after the first meeting on 7.12.2011. On 7.12.2011 the representatives of the Petitioner are said to have handed over a set of documents to the representative of the Respondent to show that shifting of Els in phases is technically possible. The Petitioner in support of its contention in that behalf that the Respondent itself, while shifting its POIs of Kolkata Circle had issued a letter of 10.5.2010 which is at page-48 of the paper book and a letter dated 5.3.2010 in respect of Haryana Circle which is at page-50.

It is stated by Mr.Navin Chawla, learned counsel appearing on behalf of Petitioner that along with its additional affidavit the Petitioner had also furnished a similar example in respect of Ahmedabad Circle.

When the matter was taken up for further hearing to-day, Mr.Kohli, learned counsel appearing on behalf of Respondent would contend that he had contacted the officer in question and in particular Mr.Naresh Saroha of Ambala and he was informed that although in terms of letter dated 5.3.2010, the shifting was to be completed by 12.3.2010 but in fact the same took around a month.

As prayed for by Mr. Kohli, let an affidavit be filed on behalf of the Respondent explaining its position with regard to the aforementioned letters dated 10.5.2010, 5.3.2010 and the instance of Ahmedabad Circle as contained in paragraph-5 of the additional affidavit of the preliminary submissions at page-264. Such an affidavit, Mr.Kohli submits, shall be filed within two weeks. Let the matter appear under the heading "for direction" on 9.1.2012. On that date Mr.Chawla may make his client's position clear as to whether the deponent of the said counter affidavit is to be cross-examined. If that be so, the learned counsel may also mention before this Tribunal even before the said date with advance notice to the learned counsel of the Respondent so that a date for cross-examination of the said witness may also be fixed.”

28. Respondent was given liberty to obtain clarifications from its Kolkatta, Ahemdabad and Ambala circles with regard thereto. 29. An affidavit has been filed affirmed by Shri J.P. Saini, from a perusal whereof it appears that answers were sought for in respect of certain questions from the Kolkatta and Ahemdabad Circles. No response is said to have been received from its Ambala circle. 30. We may also place on record that for consideration of the technical team of the Respondent, the Petitioner in one of the meetings had handed over some other examples as regards shifting of POIs which took place in another Exchange in Ambala as also Lucknow, but the same having not been referred to earlier, we do not intend to rely thereupon. 31. Before, considering the rival submissions made by learned counsel for the parties, we may notice the affidavit of the Respondent annexed to the questions and answers of is Kolkatta and Ahemdabad circle. 32. Perusal of the minutes of meeting dated 7.12.2011 would clearly go to show that two separate options had been put forth before the technical team of the Respondent; the first being the entire exercise can be undertaken in one go and the second being that it can be done in phases.

We may furthermore place on record that according to the Petitioner the peak hour in a minute in the aforementioned two exchange is 77.2% and 72.3% respectively.

33. The Petitioner has relied on the following charts showing flow of traffic:

Hour MSC1-RNTAX MSC2- RNTAX Utilization Utilization 0.00 4.88 9.62 1:00 2.64 4.50 2:00 1.21 2.36 3:00 0.58 1.39 4:00 0.44 0.71 5:00 0.63 1.16 46:00 2.93 4.59 7:00 7.77 13.43 8:00 13.28 23.17 9:00 19.24 31.64 10:00 24.58 39.25 11:00 27.92 44.93 12:00 27.76 45.40 13:00 25.72 41.50 14:00 24.52 38.59 15:00 23.51 38.36 16:00 25.04 41.02 17:00 27.43 44.03 18:00 28.66 46.67 19:00 32.91 50.89 20:00 34.14 52.91 21:00 32.48 50.30 22:00 23.34 36.74 23:00 11.54 20.55

MSC1 IN1DRN RNTAX No. of E1s 63 No. of 1934 channels Hour INC OUT Total Utilization Traffic Traffic Traffic 0.00 89.58 4.78 94.35 4.88 1:00 47.90 3.08 50.98 2.64 2:00 22.68 0.75 23.43 1.21 3:00 10.75 0.43 11.18 0.58 4:00 7.73 0.80 8.53 0.44 5:00 10.80 1.35 12.15 0.63 6:00 51.20 5.38 56.58 2.93 7:00 138.25 12.03 150.28 7.77 8:00 229.10 27.73 256.83 13.28 9:00 326.55 45.50 372.05 19.24 10:00 410.03 65.30 475.33 24.58 11:00 464.03 76.03 540.05 27.92 12:00 453.18 83.73 536.90 27.76 13:00 415.78 81.63 497.40 25.72 14:00 396.30 77.88 474.18 24.52 15:00 382.50 72.18 454.68 23.51 16:00 415.13 69.15 484.28 25.04 17:00 457.25 73.23 530.48 27.43 18:00 500.98 53.30 554.28 28.66 19:00 579.18 57.28 636.45 32.91

20:00 615.43 44.83 660.25 34.14 21:00 590.40 37.68 628.08 32.48 22:00 429.45 21.98 451.43 23.34 23:00 211.48 11.63 223.10 11.54

MSC2 IN1DRN RNTAX No. of E 1s 51 No. of 1562 channels Hour INC Traffic OUT Traffic Total Utilization Traffic 0.00 144.18 6.05 150.23 9.62 1:00 67.80 2.48 70.28 4.50 2:00 35.85 0.95 36.80 2.36 3:00 19.88 1.85 21.73 1.39 4:00 10.60 0.48 11.08 0.71 5:00 17.23 0.85 18.08 1.16 6:00 68.33 3.38 71.70 4.59 7:00 199.15 10.68 209.83 13.43 8:00 334.10 27.85 361.95 23.17 9:00 442.15 52.10 494.25 31.64 10:00 552.40 60.73 613.13 39.25 11:00 622.53 79.35 701.88 44.93 12:00 625.85 83.38 709.23 45.40 13:00 573.30 74.95 648.25 41.50 14:00 535.85 66.95 602.80 38.59 15:00 531.23 67.95 599.18 38.36 16:00 568.05 72.70 640.75 41.02 17:00 618.55 69.23 687.78 44.03 18:00 677.70 51.33 729.03 46.67 19:00 735.08 59.85 794.93 50.89 20:00 776.93 49.50 826.43 52.91 21:00 742.40 43.35 785.75 50.30 22:00 548.05 25.83 573.88 36.74 23:00 309.25 11.80 321.05 20.55

34. We may also notice the pattern of flow of traffic in respect of Rajender Nagar Tax. BSNL Rajender Nagar Tax TRAFIC REPORT OF VODAFONE POIs Name of Vodafone Type of Number Number Busy Circuits Margin Number BSNL GMSC Traffic of E1 of hour required for 50% of E1 Switch and its (NLD/ILD) circuits Traffic as per traffic as required and its sp Erlang per NM SP Table cell guidelines Rajender Siemens Nagar GMSC D-Tax 1 sp=9005 NLD 63 1934 793 835 1252.5 42 Rajender Siemens Nagar GMSC D-Tax 1 sp=9110 NLD 51 1553 1160 1200 1800 60

35. It is, however, stated that in fact the number of E1s on the basis whereof the same is being run is only 51. Mr. Kohli would contend that the number of E1s required being 60, the exchanges cannot be allowed to operate with 51 E1s. 36. Mr. Navin Chawla, on the other hand, on instructions submitted that in fact keeping in view the low volume of traffic originating and terminating in the Rajender Nagar and Eastern Court Exchanges, a large number of POIs have recently been surrendered. 37. We may not go into aforementioned question as the same had not been raised as also in view of the order proposed to be passed by us.

38. It is not in dispute that while undergoing the process of migration the flow of traffic as also the quality of calls must be maintained. 39. The TRAI in its report for the month of August, 2011 with regard to BSNL Level –I Tax as far as the calls originated and terminated in the exchanges of both the parties hereto, stated the same to be 0%. To the similar effect is the report in respect of Eastern Court Tax and Rajender Nagar Tax for the month of June, 2009. 40. In this case we are required to construe the interconnect agreement. The interconnect agreement containing terms and conditions having been agreed to by the parties, indisputably the same cannot be supplanted or supplemented by internal circulars. [See Bharat Sanchar Nigam Limited & Anr. vs. BPL Mobile Cellular Limited & Ors. page 597]. 41. The contract, it is trite, is required to be construed, inter alia, having regard to the conduct of the parties, as to how they understood the same. Like the Petitioner, the BSNL had also taken recourse to migration. Other operators including the Petitioner had rendered full co-operation with it in doing so without levying any charge. 42. A charge can be levied, if at all, if any expenditure is incurred therefor. If expenditures are incurred keeping in view the doctrine of level playing field, the right to be reimbursed must be held to be reciprocal and, thus, both the parties would have similar rights and obligations. [See Reliance Energy Ltd. And Anr. vs. Maharashtra State Road Development Corpn. Ltd. & Ors. 2007(8) SCC 1]. BSNL may be in dominant position but it cannot levy a charge on the basis of a circular letter. 43. Surcharges, it will bear or repetition to state, can be levied only on work done principle. Both the parties to the agreement must be treated on equal footing. The performance of the terms of contract must be on a reciprocal basis. It may be noticed that the October, 2010 circular had not been made a part of the interconnect agreement. In effect and substance the Respondent has also given up that case contending that actual augmentation of resources is necessary. 44. We, therefore, are of the opinion that the first contention of the Respondent must be rejected. 45. In support of its second contention the Respondent will contend that the GOS should be 0.005 i.e. 5 in 1000 calls.

46. According to it in terms of the interconnect agreement the old GMSC has to be surrendered and new GMC had to be set up. We fail to appreciate as to what would happen to the new E1s in the GMSC. 47. Mr. Kohli submits that the same may be allotted to some other operator. If that be so, the Respondent would earn revenue therefrom. Would in such an event the requisite amount earned by it would be refunded to the Petitioner? 48. In the aforementioned backdrop, we may notice the response of the Kolkatta and Ahemdabad circles of the Respondent. To its Kolkatta circle the following questions were put by the respondent: “1) Whether the shifting of E1s was done in one go or in piecemeal? 2) Whether the testing was done on each E-1 or only one or part E1s were tested per group & balance of the group transferred without testing. 3) The time undertaken for completion of the entire process of shifting of POIs? 4) Is it possible to shift the POIs/E1s without augmentation?”

49. Answers thereto read as under: “1. The shifting of E1s in respect of M/s Vodafone was done in one go. 2. The testing was done on 01 (One) E1 per trunk group of particular POI covering all test scenario as per test schedule and the balance E1s were tested by making successful call only. 3. The complete time taken to shift the Vodafone POI from TBZ MSC5 to Chittaranjan GMSC is 02 months (approx.). 4. Not relevant as a compete new MSC has been installed.

50. Annexure –I enclosed therewith is as under: Annexure – 1 S. Case Order No. & date Reasons NO & from 1. Shifting of POI from ES 310/ Cellular / In the interest of CTD MSC-5 at TBZ to CTD dated BSNL and thus Chittaranjan GMSC. 10.05.2010 from waiving off AGM (VAS) shifting & Calcutta additional leased Telephones. line charges. 2. Shifting of POI from MSC/ AB/ Decommissioning Nokia MSC Ambala to Technical/ 46 of Nokia MSC. Ericsson GMSC dated 05.03.2010 Ambala from DET ( MSC) Ambala. 3 Shifting of POI from EWSD TAX / AMB/ Decommissioning EWSD TAX Ambala City/ Genl/ 34 for closure of City to IP TAX for dated 14-6-2011 EWSD TAX voice and OCB TAX for from DE (NOW- Ambala City. nailed up connections INT) Ambala. 4. Shifting of POI from NC/TSO/-Genl/10- To distribute to MSC Shahibaug to 11/44 dated traffic and ensure NGN GMSC 21.12.2010 from redundancy. Shahibaug, AGM ( NC) % Ahmadabad, (Same CGMT exchange building ) Ahmadabad.

51. What is the effect of the said questions and answers? To the first question the answer of the Kolkatta circle was that the shifting of POIs was done in one go. It is, thus, possible to be done. Evidently, thus, the procedure which was followed is different from the one which is being contended by the Respondent. 52. So far as the second question is concerned, the testing was done on E-I per trunk Group of particular POI covering all test scenario as per test schedule and the balance E1s were tested on making successful calls only. 53. So far as the third question is concerned, it was stated that the complete time taken to shift the Vodafone POI from TBZ or MSC-5, Chittaranjan GMSC took about two months. The hypothetical question raised being question No.4 was treated to be irrelevant as a complete new MSC had been installed. 54. So far as Ahemdabad circle is concerned, the questions and answers are contained in the letter dated 6.1.2012. It reads as under:

(1) Whether the shifting of E1s were done in go or piecemeal: Shifting was done in one go with incremental of 10E1s (2) Whether the testing was done on each E1s or only one or part E1 were tested per group & balance of the group transferred without testing. The testing was done on each E1. (3) The time undertaken for completion of the entire process of shifting of POIs. To complete the work of shifting, time taken for entire process was 27 days. (4) Is it possible to shift the POI/E1s without augmentation? The E1s were shifting from one GMSC to another GMSC in the same building. However, total no. of E1s operational before, during and after shifting of E1s were same.

Augmentation of resources, therefore, was not needed. 55. Mr. Kohli, however, would vehemently urge that perusal of paragraph 3 of the Minutes of Meeting dated 17.12.2011 would also show that 50% of the POIs were required to be increased. Mr. Chawla, however, would contend that from the traffic flow it would appear that in fact the number of calls had gone down, keeping in view the NLD and ILD service as would appear from the traffic records as also the Regulation of the TRAI dated 1.7.2005. 56. The matter has been pending at the level of the BSNL as also before this Tribunal for a long time. We have before us at least two examples that shifting of POIs may be possible to be completed in phases. For the reasons best known to the Respondent, it had not brought to the notice of the concerned circles that whereas the maximum traffic in this case is 77.2% and 72.3%, the percentage in regard to Ahemdabad Circle was 91.1%. There also exists a dispute as to whether the number of E1 should be more than they are at present existing, inasmuch as whereas according to the Respondent the number of E1s would fall short of the requirements, according to the Petitioner, the requirement has come down. 57. There also exists a dispute as to whether enhancement of 50% resources was taken into consideration and additional E1s had to be installed within a period of twelve months. 58. Although there is no material on record, Mr.Chawla would contend that in fact E-1s have been surrendered by the Petitioner in August, 2010. With that in view the question as to whether if the number of E1 are increased to 50% what would happen to the additional resources installed after one month must also be considered. 59. Keeping in view the facts and circumstances of the case, we are of the opinion that an independent Commission of two experts should be appointed to study and report to the Tribunal after examining the entire issue and after spot inspection. 60. The parties are hereby directed to render all cooperation to the Commission. The issues for consideration of the Commission will be :-

1) Whether it is possible for the Respondent to carry out the shifting of equipment without augmenting its resources? It is to be kept in view that flow of traffic and quality of calls in accordance with existing norms is maintained. 2) What is the reasonable time required for completing the process of shifting the equipment? 61. We hereby appoint (1) Mr. J. Gopal, former Advisor, DoT; and (2) MR. R. N. Prabhakar, former Member, DoT and former Member, TRAI as Commissioners. We request them to submit report within fifteen days. 62. The remuneration of learned experts and other incidental expenses which may be incurred by them shall be borne by the parties in equal proportion. 63. Put up after four weeks.

(S.B. Sinha) Chairperson (P.K. Rastogi) Member March 6, 2012 `anu’