Chennai: The Telecom tribunal struck down TRAI’s new norms on predatory pricing, saying they lacked required transparency, an order that provides much-needed relief to operators such as Bharti Airtel and Vodafone Idea who had alleged that the rules were tailored for a new entrant.
The Telecom Regulatory Authority of India (TRAI) had — following allegations of Reliance Jio’s entry tactics of life-long free voice calls and dirt cheap data constituting predatory rates — in February defined what would constitute significant market power (SMP) that could abuse the market with a predatory pricing.
These were, however, contested by old operators who felt the norms favoured Jio. In a strongly-worded order, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) said TRAI could not impose financial disincentives and ordered it to rework the predatory pricing rules within six months.
“The impugned tariff amendment order is set aside in so far as it changes the concept of SMP (significant market power), non-predation and the related provisions,” TDSAT Bench comprising Justice SK Singh and member AK Bhargava said in an order dated 13 December.
It further added: “…the impugned decisions on the issue of SMP and predation cannot be sustained for the reasons of lacking the required transparency.”
The tribunal further held that segmented offers and discounts in ordinary course of business to existing customers without any discrimination do not amount to a tariff plan and therefore “need no reporting in manner prescribed for regular tariff plans”.
This means operators would not be duty-bound to disclose to the regulator, the details of such tailor-made offerings typically meant to retain customers.
TDSAT, however, pointed out that the regulator can call for details of any segmented offer about which it may receive specific complaints.
TRAI, in its contentious February order, had tweaked the definition of significant market power to State only players with substantial revenue and subscriber base could potentially abuse market with predatory pricing.
The earlier criteria also took into account high volume of traffic. An operator would be liable to cough-up a penalty of up to Rs 50 lakh per telecom circle, if a tariff was found to be predatory.
TRAI’s changed rules had sparked-off a furore in the industry. Older and established telecom carriers had alleged that the order virtually permitted a telecom service provider, an “effective significant market player”, to indulge in predatory pricing to the severe detriment of others.
PTI had reported that TRAI, when contacted, said it is looking at the telecom tribunal’s ruling and may appeal in the Supreme Court if it found any “legal issues for deliberation”.
“We are looking at the order by TDSAT, and are examining the issues…prima facie there seems to be certain law points for deliberation and if that is so, we may go to the SC,” Trai Secretary S K Gupta said.
| Revamped MNP |
| TRAI has revamped mobile number portability (MNP) rules, making the entire process faster and simpler, and prescribed two days timeline for port out requests within a service area.
Similarly, timeline of four working days has been prescribed for requests for port out from one circle to other. The latest amendments to the Telecommunication Mobile Number Portability regulations form part of the regulator’s “continuous endeavour” to make the process more “subscriber-friendly”, according to a statement by TRAI. Each “wrongful rejection” of the request for porting will attract penalty of up to Rs 10,000, it said. |