New entrant Reliance Jio is abusing “dominant position” by involving in predatory pricing practices through its free promotional services, Airtel has said in a counter complaint with the competition commission of India (CCI), according to this ET report. It added that Jio is a dominant player in the telecom industry since “it’s a subsidiary of Reliance Industries Limited (RIL), which is the largest enterprise in India in terms of size, revenues, assets, and value.”
Airtel was responding to Jio’s complaint in November with the CCI, wherein the Mukesh Ambani-owned telco alleged that Bharti Airtel, Idea, and Vodafone have formed a cartel to restrict its operations by denying interconnection points. At that time Airtel and Vodafone said that it was yet to receive any official communication regarding the complaint and rejected Jio’s allegations. MediaNama has written to both Reliance and Airtel for more details and will update the story once they respond.
According to the report, Airtel has termed Reliance’s free services as “predatory”, shaped in a tactical manner to “eliminate competition” and eventually create a monopoly situation in the market. “Once Jio obtains higher market share, it would likely increase costs or even charge for voice calls since competition will be limited and the customer will be left with lesser number of service providers to choose from,” it added.
However, Jio has responded to the allegations stating that all tariff plans offered by it is in compliance with existing regulations and that telecom regulator TRAI had approved the tariff packs. “India’s telecom sector has tended to progress due to disruptive innovation brought in by a new comer, but unfortunately, the incumbents led by Airtel have always tried to block such initiatives,” the company added in a statement.
Legal tussle continues
As Airtel continues its legal battle against Jio, alleging that its free services are “predatory”, the TRAI last week upheld that Jio’s free data and voice plans do not violate any regulations or appear to be discriminatory or predatory. The telecom regulator was responding to Telecom Disputes Settlement and Appellate Tribunal (TDSAT), after operators including Idea and Airtel filed a plea claiming that TRAI was “perpetuating illegality” by allowing Jio to “game” the interconnection regulation with its free offers.
Apart from this, Vodafone India has two other cases involving Jio and TRAI with the Delhi HC. Last month, Vodafone filed a plea with Delhi HC stating that TRAI failed to keep a check on Jio’s free offers, which ‘blatantly violated’ regulations. In an earlier petition in December, Vodafone challenged TRAI’s Rs 1050 crore penalty for allegedly violating license norms by denying interconnection points to Jio.
Meanwhile, Airtel reported a massive quarter-on-quarter decline in every single mobile Internet statistic in Q3FY17.
- Mobile Internet user base declined around 7.74 million (12%) Q0Q to 54.91 million from 62.66 million. This is even lower than the preceding three quarters, and on par with a year ago, when Airtel had reported 54.86 million mobile Internet users.
- Mobile broadband (3G+4G)base declined 9% (3.46 million) QoQ, to 37.69 million from 41.33 million. Around half the decline in Airtel’s mobile Internet base was of broadband customers.
MediaNama’s Take: TRAI said last week that Jio’s promo packs aren’t “predatory” since Jio had two differently characterized packs with a 90 days validity each. But from the consumer’s end, data and calls are free, and hence looks attractive to subscribers and tends to be “predatory” in nature. Earlier, operators had challenged TRAI in the apex court against the regulator’s policy to reimburse customers Re 1 (or less) for every call drop. TRAI’s orders were later struck down by the SC last year, and it was seen as landmark case wherein Airtel, Idea, and Vodafone succeeded in taking down TRAI’s order.
Even if the CCI rules that Jio’s pricing isn’t predatory, the issue of call drops still remains in a limbo. It is to be noted that consumers were not reimbursed in any form poor quality of services (in the case of SC call drop order), and in this case, operators were found to be blocking interconnection points to Jio (creating more call drops). The higher court and the TDSAT should also be considering consumer’s losses and not only the providers.