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Intervention on predatory pricing not needed, says CCI chief

The Competition Commission of India (CCI) chairman believes that the current conditions of the telecom market do not warrant a regulatory intervention to curb predatory pricing of significant players, PTI reported.

Chairman Devender Sikri said at an event, “This is the limited comment I can make on the matter… It is a textbook regulation which is available. It can be used but we are not sure the timing is appropriate.” His comment comes a month after the Telecom Regulatory Authority of India (TRAI) introduced new rules governing predatory pricing and non-discrimination in tariff offered by telcos.

TRAI’s new rules

Sikri is not the first to show discomfort about the new regulations. Telecom service providers have expressed their angst too. Airtel and Idea, and Vodafone have separately filed complaints against provisions in the new rules, with the Telecom Disputes Settlement and Appellate Tribunal and the Madras High Court respectively.

The rules address reporting requirements, guiding principles for checking transparency in tariff offers, the definition of non-discrimination, adherence to the principle of non-predatory pricing, the definition of predatory pricing, relevant market, and assessment of significant market power (SMP).

The rules changed the method for identifying what was a predatory offer and gave a different the definition of significant market power (SMP)—allowing pricing flexibility only to operators with less than 30% subscriber or revenue share. The previous definition also considered traffic volume and network capacity as factors.

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Industry body Cellular Operators Association of India (COAI), alleges that the changes favour one player, hinting at Reliance Jio. This will place older operators at a disadvantage and stop them from responding to “what may be actual predatory tariff plans”, COAI said.

With regard to Vodafone’s case, the Madras High Court has stayed any action by TRAI against the telco for not displaying segmented pricing offered only to specific customers, on its website.

Cartelisation case

Last year, Reliance Jio had lodged a complaint with the CCI alleging that the three cellular operators had colluded with each other to prevent it from building its customer base. However, the Bombay High Court quashed CCI’s inquiry saying that CCI had “no jurisdiction” to interpret contract conditions or policies of the telecom sector, which was governed by the TRAI. Jio and CCI have now moved the Supreme Court in the matter, and the complaint will be probed after SC takes a call.

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