Criticising Trai’s latest regulation on predatory pricing for favouring Reliance Jio, Vodafone Group CEO Vittorio Colao said on Monday that the operator will challenge the latest amendments to the telecom tariff order (TTO) in court. “Yes, it does,” Colao said when asked if the latest regulation by Trai favours Jio. He was speaking at a media round table with select reporters. Asked if Vodafone will challenge the regulations, he said, “Yes”.
On February 16, Trai came out with the definition of predatory pricing for the first time, where it said that if an operator in a relevant market, of which it controls more than 30% share, comes out with a price that is below average variable cost and is with the intention to reduce competition or eliminate competition, the pricing will be considered predatory Colao further said, “India is a market where we have seen 80% collapse in data pricing. A market where there has been an extraordinary launch from a new competitor, who has for months given for free and fairly low price to new customers. Of course, we have reacted and out of the blue, magically, a law or regulation comes that we can react only if and somebody should approve. It sounds like you have to fight somebody with hands tied at the back. That’s not fair… we want fair competition. So we are not in agreement with that specific regulation”.
Industry body COAI, on February 20, had said that Trai’s latest regulations benefit a particular operator, and had hit out at the sector regulator, saying that the recent amendment has “deeply victimised” the industry. It also said its members, including Vodafone, are exploring legal avenues.
Colao also said the regulations in India are complicated. “But I still feel the regulations in India are too complicated, there’s too much red tape, too many approvals, too much interference, and eventually things do get done in India but it takes only longer. It is important to modernise, speed up the bureaucracy and the decision-making process.” He, however, welcomed finance minister Arun Jaitley’s comments recently that the Vodafone tax decision was an erroneous one. “I noticed the comment of the finance minister. They are useful because they actually stated something we have been saying for years. Retrospective changes in taxation are not something good. I welcome the comments from the minister and even more convinced that we are right. Retrospective taxation is wrong from the fact that we were also taxed for capital gains that was made by somebody else. This was a double wrong, not just a single wrong. We just have confidence in the arbitration and wait for the results of the arbitration. And, of course, the comments from the finance minister helps,” he added.
On Vodafone India-Idea Cellular merger, he said the exercise is on track. “Two companies with good management teams create a better one with a
single management team. Consolidation will create a much stronger player for the future. We will have the ability to accept synergies from the merger that can be used to re-invest in the business,” Colao added.
(Travel for this report was sponsored by Huawei Telecommunications India)