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  1. Predatory pricing: TDSAT directs TRAI to respond to Bharti, Idea petitions

Predatory pricing: TDSAT directs TRAI to respond to Bharti, Idea petitions

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Monday directed Trai to file its response on the appeals by Bharti Airtel and Idea Cellular, which alleged that the regulator’s latest regulation on predatory pricing had “significant implications” for the sector and would also hit customer interests.

By: | New Delhi | Updated: March 6, 2018 5:56 AM
TDSAT, trai, airtel, idea cellular While the TDSAT did not grant a stay on the amendments to the TTO, as urged by Bharti and Idea, the tribunal directed Trai to file its response within four weeks, following which the two operators have been provided three weeks to respond to the regulator’s response.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Monday directed Trai to file its response on the appeals by Bharti Airtel and Idea Cellular, which alleged that the regulator’s latest regulation on predatory pricing had “significant implications” for the sector and would also hit customer interests.

While the TDSAT did not grant a stay on the amendments to the TTO, as urged by Bharti and Idea, the tribunal directed Trai to file its response within four weeks, following which the two operators have been provided three weeks to respond to the regulator’s response. The next hearing is scheduled for April 17.

Last week, both the operators had moved the tribunal against Trai’s 63rd amendment to the telecommunication tariff order (TTO), where the regulator has defined predatory pricing for the first time and has also amended the definition of “significant market player” or SMP. In their appeals, both the operators urged the TDSAT to stay the new regulations till the case is decided.

Both Bharti and Idea pointed out that under the existing regime, an SMP is defined on the basis of the subscriber base, turnover, switching capacity and traffic volume. But, through the latest amendments, there has been a complete change in the entire regulatory regime. So, now a SMP will be defined on the basis on only two criteria – subscribers and revenue. Also, there was “no hint” of the changes in the definition of SMP during the consultation process on the regulatory principles of tariff assessment.

They also challenged Trai’s regulation directing operators to report segmented offers, which are provided to customers, mostly on an individual basis and is used by operators to retain subscribers.
In its appeal to the TDSAT, Bharti said the amendment has “far reaching” and “significant implications” for the sector and it “brings into question the regulatory approach and adversely affects the constitutional rights of the appellant (Bharti)”.

Questioning the latest regulations, the country’s largest telecom operator claimed that the entire exercise is contrary to directions given by the TDSAT in its order on February 1, 2018 and that Trai’s directions are without proper consultation. “It was based on the earlier consultation paper, rendering the entire exercise invalid and non est,” Bharti said.

Challenging the order, Bharti said, “In view of this, the order is legally unsustainable and fails to pass the test laid down in Section 14 A (7) of the Trai Act, particularly of legality, correctness and propriety.” Without naming Jio, Bharti said the entire exercise is “skewed” and “tailor-made to suit a single new telecom operator”, while undermining the sanctity of the regulatory decision making process and by-passing regulatory and Constitutional principles.

Urging the TDSAT to stay Trai’s amendments to the TTO, the operator said it will “cause severe detriment” to the operators as there will have no means to meet the predatory pricing and consequent loss of subscribers and business by another operator.

Idea in its appeal said Section 11 (2) of the Trai Act only empowers the regulator to fix tariffs. But, Trai has amended the TTO and introduced several new provisions (and done away with crucial stipulations), which are completely “ultra vires” to the power of Trai aside from being “arbitrary, discriminatory and against the interest of the consumers”.

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