Home India Court quashes CCI cartelisation probe into top 3 telcos

Court quashes CCI cartelisation probe into top 3 telcos

The ruling gives some relief to the nation’s top telecom companies that suffered a blow just a few days back when the sector regulator cut the interconnect charge they are entitled to on calls made from a rival’s network.

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MUMBAI | NEW DELHI: The Bombay High Court on Thursday quashed the Competition Commission of India’s order to probe Reliance Jio Infocomm’s complaint of cartelisation against Bharti Airtel, Vodafone India and Idea Cellular. The ruling gives some relief to the nation’s top telecom companies that suffered a blow just a few days back when the sector regulator cut the interconnect charge they are entitled to on calls made from a rival’s network.

A bench comprising Justices Anoop V Mohta and Bharti Harish Dangre ruled that the CCI had no jurisdiction to order a probe into the matter, two lawyers present in the courtroom said. Jio had complained that the three companies formed a cartel to deny interconnection points to the newcomer, resulting in calls made by its customers to the networks of the rivals getting failed. The court noted that the matter was related to the Telecom Regulatory Authority of India’s (Trai) regulations and contracts between the mobile phone operators, and that the CCI cannot get into it.

Justice Mohta termed the anti-trust body’s order as “illegal”, based on “irrelevant material” and pronounced without considering “relevant material and law”, one of the lawyers said.

The CCI ordered the probe in May, saying that there was prima facie evidence of the top three carriers forming a cartel to deny Jio adequate points of interconnection. Acting on Jio’s complaint filed in November, the fair-trade regulator gave 60 days to the director general of CCI to complete the probe.

READ MORE: Have power to settle competitive tariff issues: TRAI to CCI

Idea Cellular and Bharti Airtel approached the Bombay HC in June, seeking a stay on the investigation on the grounds that there were already a regular and a tribunal for dealing with issues related to the sector. In July, the CCI told the HC that it would halt the probe and wait for the court’s decision.

A lawyer present in the court said the CCI could now approach the Supreme Court, since the high court’s order has challenged its jurisdiction. Mukesh Ambani-owned Jio may also go to the Supreme Court.

Details of the order weren’t immediately available.

Bharti Airtel, Idea Cellular, Vodafone India, Jio and CCI didn’t respond to emails seeking comment. Rajan Mathews, director-general of the Cellular Operators Association of India (COAI) in which all four carriers are members, said he was “very pleased” with the court order.

The order is a relief for the top three companies as it comes days after Trai cut the interconnect usage charges (IUC) to less than half. Bharti Airtel, Idea and Vodafone, which together account for as much as 60% of India’s telecom subscriber market, are expected to lose roughly Rs5,000 crore annually due to the cut in IUC. Jio, though is set to benefit as its IUC payouts will reduce.

COAI was also a party to the case at the CCI as it was accused of supporting the big three telecom companies to deny POIs to Jio. The antitrust body had ordered a probe into the functioning of COAI as well, saying the industry body was prima facie found to be promoting the interests of the incumbents and allowing it to be used as a platform for preventing Jio’s smooth entry into the sector.

“We feel that our original stand has been vindicated by the court ruling, that principally we’ve done nothing that is in contravention of competition and we acted well within the boundaries afforded to associations,” COAI’s Mathews said.

The battle between the top three telcos and newcomer has been going on since last September, when Jio entered the industry with free services for about six month. It led to a price war which continued even after Jio started charging customers for data starting April this year.

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