Trai chairman RS Sharma has said top telcos are free to match the lower or even free offers of a rival without falling foul of the latest predatory pricing order that redefined significant market power (SMP) because their intention is not to kill competition.
“We are not saying that you cannot do anything. For example, an SMP can also give free offers. So long as it is not doing it with a view to kill competition, it is fine,” Telecom Regulatory Authority of India (Trai) chairman Sharma told ET.
Sharma’s comments may ease the concerns of India’s top telcos Bharti AirtelBSE -0.07 %, Vodafone India and Idea CellularBSE -0.55 %, which alleged the pricing order favoured Reliance Jio Infocomm because it gave tariff flexibility only to operators with less than 30% of the market’s subscribers or revenue. AirtelBSE -0.07 % and Idea had approached the Telecom Disputes Settlement & Appellate Tribunal seeking a stay on the pricing order, which wasn’t granted.
Airtel and the planned Vodafone-Idea combine, which are already above the 30% revenue market share threshold, said the new conditions wouldn’t allow them to respond to free or below-cost offers by Jio, which has a 13-14% market share by users or revenue and has several quarters to go before it becomes an SMP.
According to ET, Vodafone group CEO Vittorio Colao and Bharti Airtel chairman Sunil Mittal had said Trai’s order meant they would be fighting a battle with Jio with their hands tied behind their backs. Sharma sought to clear the air while criticising the operators for trying to run down regulatory institutions.
The telecom regulator slammed the Cellular Operators Association of India (COAI) and its members Bharti Airtel, Vodafone and Idea Cellular for running a media campaign to discredit the Trai without any basis. He said they should have moved court immediately after the February 16 order if they felt aggrieved.
Sharma said the discussion around tariff and predatory pricing was done at the behest of the operators and Trai’s realisation that there were gaps in the regulations. The latest order, issued after a year-long consultation, was aimed at specifying parameters that would ensure pricing was non-predatory, transparent and non-discriminatory. The basis of disallowing tariffs directed at specific individuals was to ensure non-discrimination, he said.
Sharma reiterated that tariff was within the realm of the regulator, countering the CCI’s contention that predatory pricing falls within its exclusive domain, reported ET.
