Telecom regulator TRAI will finalise in a month, its views on the rules of tariff assessment with regard to issues like promotional offers and predatory pricing. These issues – being debated as part of TRAI’s ongoing consultation on ‘Regulatory Principles of Tariff Assessment’ – have been a flashpoint between newcomer Reliance Jio and incumbent operators such as Bharti Airtel, Vodafone and Idea Cellular. “We will analyse the views received at the open house as well as the written comments, and finalise our views in the next 30 days,” Telecom Regulatory Authority of India (TRAI) Chairman, RS Sharma said on the sidelines of an open house discussion on the issue.
TRAI’s views may come as an order or a regulation, he added. “The idea is to look at the current dispensation with regard to (aspects like) transparency, non-discrimination and predatory pricing…the definition of a promotional offer…and to see whether or not there is a need to change them,” he said. The consultation on Interconnect Usage Charges or IUC – which governs the pay-outs and settlements between two operators — is “mutually exclusive” from the one on rules of tariff assessment, Sharma said.
Releasing its consultation paper on the norms for tariff assessment in February this year, TRAI had said that it aims to bring greater clarity in interpretation of various regulatory principles set out in the Telecom Tariff Order in tune with the global practices. The issues being debated include new measures that need to be prescribed to ensure transparency in the tariff offers of telecom operators, and strengthening the definition relating to “non-discrimination”.
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TRAI has sought views on which tariff offers should qualify as “promotional offers” and the need to limit the number of promotional offers that can be launched by an operator in a year, one after another or concurrently. It also seeks suggestions on definition and criteria for “dominance” in relevant telecom markets. “How to assess significant market power in each relevant market? What are the relevant factors which should be taken into consideration?” are some of the questions that have been raised by TRAI in the consultation paper.
TRAI will also review the methods and processes that should be applied to assess predatory pricing by a service provider in a relevant market.
Issues like predatory pricing, market dominance and extension of promotional offers have sparked a public spat between Reliance Jio and incumbent operators such as Bharti Airtel, Vodafone and Idea Cellular.
The incumbent operators – which have posted a dismal set of numbers in the fourth quarter – allege that the “sustained predatory pricing” by the new entrant has led to drop in revenue and profitability and hit the key financial metrics of the industry.
Additionally, the telecom tribunal is hearing a plea by incumbent operators challenging the regulator’s decision that allowed Reliance Jio to continue free promotional offer beyond the stipulated 90 days.