The Telecom Regulatory Authority of India (Trai) has responded to the Competition Commission of India’s (CCI) stand that it does not have the ‘wherewithal’ to deal with competitive issues including predatory pricing.
The Telecom Regulatory Authority of India (Trai) has responded to the Competition Commission of India’s (CCI) stand that it does not have the ‘wherewithal’ to deal with competitive issues including predatory pricing. The Authority has said it has the powers to ensure measures to facilitate ‘competition’ and promoting efficiency.
In a letter to the fair trade regulator, Trai has said the Authority has been dealing with issues such as predatory pricing, anti-competitive behaviour, etc, for more than a decade and is competent to handle the issue in future, keeping in view the ‘dynamic nature’ of the telecom industry.
“Section 11 (1) (a) (iv) of the Trai Act states that the functions of Trai shall include taking measures to facilitate competition and promote efficiency in the operation of telecommunication services so as to facilitate growth in such services,” Trai chairman RS Sharma said in his letter to CCI chairman Devender K Sikri, a copy of which was seen by FE.
The Authority, in its consultation paper in January 2006, had addressed the issue of ‘predatory pricing’ in the telecom sector. “Thus, any concerns that the CCI has about the Trai’s wherewithal for the determination of these issues might not be well-founded. Trai has in the past, and will continue to deal with such issues in a careful and nuanced manner,” the Trai said.
Sharma further said one of the Authority’s statutory duties is to fix tariffs for telecom services and it has been issuing Telecom Tariff Orders (TTOs) since 1999 to prescribe tariffs. Even in 2004, when Trai adopted the policy of forbearance in telecom tariffs, it still mandated certain reporting requirements to ensure competitive behaviour of service providers, ensure consumer interest and orderly growth.
On the need for the consultation paper, regulatory principles of tariff assessment, based on which the CCI questioned Trai’s authority to deal with predatory pricing and market dominance, Sharma said it was felt that there were several issues that need elaboration.
“The principles of tariff reporting as enshrined in the TTO clearly define certain terms such as non-discrimination, but leave various other terms such as transparency and non-predation, which require further elaboration in the context of emerging retail tariff. In this background, the Authority felt it necessary to initiate a consultation process on some of the extant regulatory principles and if required, to bring about necessary modifications to effectively address emerging issues,” he added.
Trai further said its functions and jurisdictions and that of the CCI are “distinct and very well demarcated” and “prima facie” there appears to be no overlap. However, Sharma offered to hold a meeting between the two regulators to deliberate on the issues.
Rishi Ranjan Kala