A pubic sniping match has been going on between the Cellular Operators Association of India (COAI) and Reliance Jio over the TRAI’s regulation allegedly favouring the Mukesh Ambani-owned telecom major.
The sequence of events for this whole episode is as follows. First, COAI alleged that TRAI’s regulations, including its rules and definition of predatory pricing, had distorted the market. The industry body also alleged that the orders appeared “to be strengthening the ambitions of one particular operator with deep pockets and monopolistic designs at the expense of other operators.” COAI’s statement doesn’t directly name Reliance Jio, but the implication is pretty obvious.
Then Reliance Jio hit back saying that the industry body’s comments were “intentionally, wrongfully and maliciously made to induce disparaging and inimical opinions against Reliance Jio” and demanded a public apology within 48 hours.
COAI rebutted Jio’s verbal offensive against it, saying that was duty-bound as an association to raise concerns related to the growth of the sector. The association had also said “differences” are with orders of regulator Trai, not a specific operator.
TRAI’s take on predatory pricing
Last week, TRAI amended the regulatory principles for assessing how telecom service providers (TSPs) set tariffs for the services they provide, in order to ensure that transparency is maintained, as well as to prevent discrimination and predatory pricing in telecommunication services.
In regards to predatory pricing, TRAI says that if a telecommunication service is provided at a price below the average variable cost in a relevant market, and if this is done in order to either reduce competition or eliminate competitors in that market, then it will considered as predatory pricing.
The association said that a majority of its members agreed with the assessment of TRAI’s regulations, except Reliance Jio which had a divergent view on the matter. “Over the past 12-18 months, regulation, after regulation put out by TRAI, has ended up in distorting the competitive landscape in favour of one operator, while putting all other operators at a serious disadvantage,” the COAI statement said.
This had ‘destroyed’ the financials of the industry with tens of thousands of jobs and tens of billions of dollars of investment at stake, it added. “The COAI today expressed its deep disappointment and alarming concern regarding TRAI’s tariff order amendment. For some reason these orders seem to be strengthening the ambitions of one particular operator with deep pockets and monopolistic designs at the expense of other operators,” it said.