In the latest update in the very public war of words ongoing between the Cellular Operators Association of India (COAI) and the disruptive entrant in the telecom sector Reliance Jio, the industry body has hit back at Jio for accusing it of discriminatory action.
The series of rebuttals began when COAI alleged that TRAI’s regulations on predatory pricing, including its rules and definition of predatory pricing, had distorted the market. The association, which has all major telcos as its members also said 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.”
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.
In response to this, COAI’s latest statement alleges that Jio’s notice intends to sideline genuine issues raised by the body, and that Jio was “attacking, belittling and making false imputations against the COAI”. The industry body also asked for a public apology from Jio and added that it reserves the right to initiate legal action against the company for false and malicious imputations against COAI and its officers.
The body said that Jio’s “attack” was in line with its previous conduct, when it has tried to “malign the reputation COAI” every time it has taken a stand Jio disagrees with.
COAI also quashed Jio’s accusation that the body’s comments on predatory pricing only reflect views of Airtel, Vodafone and Idea, underlining that all telecom service providers but Jio voiced the same view.
A few days ago, COAI chairman Ranjan Mathews said that the body was duty-bound to raise issues affecting the sector. Mathews also said that an apology to Jio was out of question.
In February, the TRAI amended the regulatory principles for assessing how telecom service providers (TSPs) set tariffs for the services they provide. One of the key elements of this amendment was non-predation. TRAI 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 considered as predatory pricing.
COAI had then flagged the revised definition of Significant Market Power (SMP) that now excludes parameters like traffic volume and switching capacity, and said such changes will place older operators at a disadvantage and stop them from responding to “what may be actual predatory tariff plans”.
Now 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.
The telecom industry has changed drastically since the entry of Jio in 2016, where many telcos have gone bankrupt, the latest being Aircel. As per latest estimates, Jio already commands nearly 14% revenue share of the market.