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  1. Reliance Jio now dragged to CCI by Bharti Airtel over predatory pricing

Reliance Jio now dragged to CCI by Bharti Airtel over predatory pricing

Bharti Airtel has approached the Competition Commission of India (CCI) accusing the Mukesh Ambani-led Reliance Jio Infocomm (RJIL) of predatory pricing and indulging in an anti-competitive behaviour, reports Rishi Ranjan Kala in New Delhi.

New Delhi | Updated: February 7, 2017 12:54 PM
Bharti has said Jio will continue to provide free voice calls, which is again predatory in nature with the objective of injuring rival telecom operators and creating a monopoly. Bharti has said Jio will continue to provide free voice calls, which is again predatory in nature with the objective of injuring rival telecom operators and creating a monopoly.

Bharti Airtel has approached the Competition Commission of India (CCI) accusing the Mukesh Ambani-led Reliance Jio Infocomm (RJIL) of predatory pricing and indulging in an anti-competitive behaviour, reports Rishi Ranjan Kala in New Delhi.

The move comes around two months after Jio Infocomm moved CCI accusing the three incumbent operators (Vodafone, Idea and Bharti) alleging that they are abusing their dominant market power and formed a cartel of sorts and denying it the requisite number of points of interconnect, which is inconveniencing its customers.

While the CCI’s stance on the Bharti’s complaint is still not known as it was filed only on February 2, with regard to Jio’s complaint which was filed in November 2016, the CCI has asked its director-general (investigation) to investigate the matter and see if there’s any merit in the case.

However, the development underlines the growing confrontation between the incumbent operators and Jio with both sides accusing each other of indulging in anti-competitive practices.

For instance, Bharti and Idea Cellular are already in the Telecom Disputes Settlement and Appellate Tribunal alleging that sector regulator Telecom Regulatory Authority of India has been a mute spectator to violations of laid down regulatory norms by Jio. The next date for hearing on the matter is February 6.

In its complaint against Jio in CCI, Bharti has said the company through Reliance Industries (RIL) has created a pan-India telecom network and distribution infrastructure even before its commercial launch and is now providing free voice and data services.

“No other telecommunication operator in the Indian market (or even across the world) is offering services free of cost or any free unlimited voice calling on the network of other operators, offering free voice calls cannot be said to meet the competition and fall under the exception. The same is predatory,” Bharti has said.

Besides, Jio being a part of RIL — the largest enterprise in India in terms of size, revenues, assets and value — has spent over $2 billion in creating pan-India network infrastructure since 2010 without launching commercial services and with no earnings as well as return on investment from its telecom business, it added.

Accusing Jio of abuse of dominant position, Bharti said the new operator has been offering free services since December 2015, when it was testing its networks and had gained around 5 million customers.

Post the announcement of its commercial launch, under the garb of its Welcome Offer and Happy New Year Offer, Jio is providing free service “with probability of further extension”, operating independent of market forces and is abusing its dominance as an enterprise, Bharti has claimed.

Responding to Bharti’s move, a Reliance Jio spokesperson said: “This latest salvo by Airtel is a clear ploy to divert attention from its own violation of licensing conditions by having denied adequate POIs to Jio and the already announced censure proceedings by the TRAI against them.”

Airtel is also acting against consumer interest by stridently opposing the ‘free voice’ benefit that Jio has been able to provide customers due to its superior next generation IP based technology, he added.
“All tariff plans of Jio have been found to be non-predatory by the regulator, so the question of our offerings being predatory does not arise,” the spokesperson said.

India’s telecom sector has tended to progress due to disruptive innovation brought in by a new comer, but unfortunately, the incumbents led by Airtel have always tried to block such initiatives, the Reliance Jio spokesperson added.

Bharti has also said that Jio will continue to provide free voice calls, which is again predatory in nature with the objective of injuring rival telecom operators and creating a monopoly. Its tactic is bearing fruits as the free pricing has adversely impacted the performance of the telcos in the October-December 2016 quarter.

It  has said the strategy behind providing free services is to attract customers, minimise competition, eliminating smaller operators as well as to gain a higher market share. Once it controls a higher market share, RJIL is “likely to increase costs or even charge for voice calls since the competition will be limited and the customer will be left with lesser number of service providers to choose from”.

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Responding to Bharti’s move, a Reliance Jio spokesperson said: “This latest salvo by Airtel is a clear ploy to divert attention from its own violation of licensing conditions by having denied adequate POIs to Jio and the already announced censure proceedings by the TRAI against them.”

Airtel is also acting against consumer interest by stridently opposing the ‘free voice’ benefit that Jio has been able to provide customers due to its superior next generation IP based technology, he added.

“All tariff plans of Jio have been found to be non-predatory by the regulator, so the question of our offerings being predatory does not arise,” the spokesperson said.

India’s telecom sector has tended to progress due to disruptive innovation brought in by a new comer, but unfortunately, the incumbents led by Airtel have always tried to block such initiatives.

By Rishi Ranjan Kala

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