MRTPC suspects Airtel-Vodafone cartel, orders probe into tariff hikes

Our Corporate Bureau
12 September 2007

Telecom majors Bharti Airtel and Vodafone Essar will face a probe over suspected cartelisation and unfair trade practices through coordinated increases in tariff. Anti-monopoly watchdog Monopolies and Restrictive Trade Practices Commission (MRTPC) has ordered a probe into the recent tariff hikes announced by the companies.

A consumer organisation had earlier challenged the tariff hike before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), even as the department of telecommunications (DoT) referred the matter to the Telecom Regulatory Authority of India (TRAI).

MRTPC has directed its investigative arm, the Director General of Investigation and Registration (DGIR), to conduct an enquiry into the manner in which the two companies raised tariffs last month. Sources said the MRTPC suspects the two telecom service operators of having formed a cartel and distorting competition in the market.

Section 10 of the MRTP Act, 1969, prohibits cartelisation in any industry and says it is a restrictive trade practice as it imposes an unjustified burden on consumers. Sources said the MRTPC took suo motu cognisance of media reports about the price hike being almost simultaneous, which it suspects was a co-ordinated action. Idea Cellular may also be included in the probe later, sources added.

The Commission also noted that the operators did not even bother to inform their customers about the price hike. This might be an unfair trade practice by the companies.

MRTPC has asked DGIR to submit a preliminary investigation report within 60 days. DGIR would be issuing notices to these companies to furnish documents supporting their claims for increasing the tariffs. If DGIR finds evidence of any such cartelisation or of adoption of unfair trade practices, then the Commission may issue notices to them and could start a judicial inquiry against these operators.