Expressing its disappointment with the recent regulations brought out by the Telecom Regulatory Authority of India (Trai) on predatory pricing, industry body Cellular Operators Association of India (COAI), which is dominated by the incumbent operators, stated it will benefit only a particular operator. Without naming Reliance Jio, which is also its member, COAI said, “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”. The industry, which was already reeling from regressive regulations like cut in mobile termination charge (MTC) and international termination charge (ITC), has now been dealt a near fatal body blow with the recent amendment to the TTO, it added.
On February 16, Trai issued regulations on predatory pricing imposing a penalty of up to Rs 50 lakh per circle on mobile operators if they are found to indulge in such practices. It also said that that a tariff would be considered predatory if in a relevant market, an operator with over 30% market share offers services at a price which is below the average variable cost, with a view to reduce competition or eliminate the competitors in the relevant market. COAI director-general Rajan S Mathews said that all the COAI members, except one (Jio), feel “deeply victimised and let down”.
Urging the government to intervene and look into the concerns raised by the industry on an urgent basis, Mathews said that an environment of regulation and policy that is not based on an equal footing will further aggravate the deep financial stress and kill future investments, innovation in an industry that has put India on the global map. Attacking Trai’s regulation, COAI said the amended TTO has modified the definition of SMP to exclude relevant parameters like traffic volume and switching capacity for determining SMP. These parameters were a part of TRAI’s own criteria in the past.