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Updated: Airtel, Idea approach telecom tribunal challenging TRAI’s predatory pricing order

Photo showing an Airtel board atop a shop

Update: TDSAT refused to pass an interim stay ruling against TRAI’s predatory pricing order, and instead gave the regulator three weeks’ time to file a response to why the predatory pricing order should not be stayed, reports ET. Airtel and Idea will have two weeks of time after that to file their rejoinders. Following this, TDSAT will hear the case again on April 17, 2018.

Earlier (March 5): Airtel and Idea Cellular have approached the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), challenging the Telecom Regulatory Authority of India’s (TRAI) predatory pricing order, reports ET. The order was part of TRAI’s latest telecom tariff amendments.

Idea Cellular confirmed to MediaNama that they have filed a petition with TDSAT, but didn’t divulge any further details. We have also written to Airtel for a confirmation of this move, and to learn more about their specific arguments against this order. We will update as and when we hear back.

In regards to predatory pricing, TRAI’s order said 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 be considered as predatory pricing.

And equally importantly, TRAI said that a telecom services provider with at least 30% share of the total activity (either subscriber base or gross revenue) will be considered a Significant Market Power (SMP). Plus the regulator will have the authority to examine the tariff plans of service providers identified as SMPs, to check for predatory pricing. And in case instances of predatory pricing is discovered, TRAI will disallow such tariff plans from continuing, “after providing detailed reasons.” That’s not all, if a service provider is found to have tariff plans with predatory pricing it will have to pay a fine of not more than Rs 50 lakh per tariff plan for each service area.

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COAI is also not happy with TRAI

The Cellular Operators Association of India (COAI) believes that the predatory pricing order has distorted the market. It also alleged that the order appears “to be strengthening the ambitions of one particular operator [read Reliance Jio] with deep pockets and monopolistic designs at the expense of other operators.” COAI further added that over the past 12-18 months several orders passed by TRAI have favoured one operator and put all others in a disadvantageous position.

Telecom market in India

As of December 2017, the top four telecom operators in India – Airtel, Vodafone, Idea and Jio – accounted for 83% of all active connections. The top three – Airtel, Vodafone and Idea – alone accounted for 70% of all active connections. Thus, as of December 2017, Jio had 13% of all active connections in India.

Overall, there were 1,167.4 million total mobile connections in India in December 2017, of which 1,015.5 million were active connections.

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