KOLKATA/MUMBAI: The telecom regulator has dismissed as “baseless” allegations by India’s top three operators that its recent rulings and policies are biased against them and said the companies are free to move court if they find any anomaly in its orders.
Cellular operators have “got into the habit of making allegations that are baseless and lacking in substance,” Telecom Regulatory Authority of India secretary SK Gupta told ET on Wednesday. “If they think we have done wrong, no one has stopped them from going to court, like they have gone in earlier cases as well.”
Bharti Airtel, Vodafone India and Idea Cellular are likely to take a two-pronged approach in their battle against the regulator, which they allege favours Reliance Jio Infocomm. They may initially approach the telecom tribunal or a high court, pointing out anomalies in the order on predatory pricing, which was issued on February 16.
Separately, they are considering writing to the government, seeking greater transparency in the regulator’s decision-making process, executives aware of the matter told ET.
The Cellular Operators Association of India (COAI), which represents all major telcos, on Tuesday accused Trai of issuing a series of regulations over the past 12-18 months, including the latest order on predatory pricing, that allegedly favour Reliance Jio, which started services in September 2016. Jio slammed the COAI’s accusations, calling them malicious, and threatened legal action for the “baseless” allegations.
The crux of the matter in Trai’s latest order is the flexibility on pricing given to operators with less than 30% of the subscribers and revenue, which the top three telcos contend benefits Jio.
However, Trai said its predatory pricing order, like all other rulings, has been explained well. The order has defined tariff, said that it should be non-predatory, non-discriminatory and transparent, and has clarified promotional tariffs, too, Gupta said.
According to the amended tariff order, predatory pricing would be determined based on a telco’s average variable cost and whether there is specific intent on the part of a carrier to reduce or kill competition.
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Rajan Mathews, director general of COAI, said the order was flawed because it would virtually impossible for the larger operators to compete with Jio and retain customers as “they would be unable to offer any matching discounts or benefits if a rival chose to poach their subscribers.”
Analysts said Trai’s amendment of the definition of significant market power (SMP) by removing the yardsticks such as data traffic volumes and restricting the term to a telco’s mobile revenue and subscriber market share would only give Jio complete flexibility in pricing till it exceeds the 30% threshold.
The larger operators are “looking at legal remedies to challenge Trai’s order, and would seek a review, given anomalies like the modified definition of significant market power and other parameters that pose serious customer retention challenges for older carriers,” Mathews said.
Mathews said they would approach the Prime Minister’s Office and the Department of Telecommunications to clear the air on which statutory body has final jurisdiction on matters like SMP and predatory pricing, apart from pushing for changes in the law to bring about greater transparency in the regulator’s decision-making process.
“We don’t know how decisions being arrived at. Trai is publishing the steps taken, but who is taking the decisions? Are the orders reflecting the majority view within Trai?” Mathews asked.
The Competition Commission of India, the country’s anti-trust watchdog, and Trai are locked in a showdown in the Supreme Court, with both claiming jurisdictional rights on anti-competitive issues in the telecom industry.