Monday, 30th October 2017

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Tribunal relief for telecom veterans

Bharti Airtel, Vodafone and Idea Cellular had challenged the rule changes Trai made

  • Published 14.12.18, 2:00 AM
  • Updated 14.12.18, 12:24 PM
  • a min read
  •  
Trai had ruled in February that predatory pricing could occur if an operator had over 30 per cent share in a market at a price below the average “variable cost". Shutterstock

Telecom tribunal TDSAT on Thursday set aside sector regulator Trai’s order on predatory and discounted pricing issued in February this year — the ruling coming as a major relief to older telecom players Bharti Airtel, Vodafone and Idea.

The Telecom Regulatory Authority of India (Trai) had ruled in February that predatory pricing could occur if an operator had over 30 per cent share in a market at a price below the average “variable cost”, meaning the older players could be under the spotlight for predatory pricing but not newer players such as Reliance Jio, which had disrupted the market with its tariff plans.

Bharti Airtel, Vodafone and Idea Cellular had some 10 months ago challenged the amendment in the rules made by Trai in its Telecommunication Tariff order.

“The impugned tariff amendment order is set aside in so far as it changes the concept of SMP (significant market player), non-predation and the related provisions,” the TDSAT said on Thursday in its order.

It said Trai cannot impose any penalty, and has asked the regulator to reconsider the provisions within six months.

Bharti Airtel, Vodafone India and Idea Cellular had moved court alleging that Trai’s new order would result in an unfair advantage to Reliance Jio as it took away their flexibility to compete and retain customers in a circle in which they are significant market players by giving segmented discounts. Telecom operators industry body COAI had said the existing players were at a “serious disadvantage,” because of the order.

The regulator had also said that telcos would have to provide services to all subscribers on the same tariff plan in a non-discriminatory manner.

“Since we have found that there was lack of required transparency in arriving at the concept of SMP, non-predation and average variable cost, it is not necessary to discuss other issues raised by the appellants and noted earlier,” the order said.

The order also targeted compulsory disclosures of segmented price discount offers.

“Segmented offers and discounts offered in the ordinary course of business to existing customers without any discrimination within the targeted segment do not amount to a tariff plan and therefore need no reporting in the manner prescribed for a regular tariff plan,” the telecom tribunal said in its order. 

Clarity call

What tribunal said:

  • Predatory pricing not just in cases where telecom player has more than 30% market share
  • Segmented offers & discounts offered without discrimination do not amount to a tariff plan