More reports on: Reliance Industries, Telecom

Airtel, Voda ask Trai to set base price as CCI dumps plaint against Jio

17 June 2017

With no way to tackle competition from newcomer Reliance Jio Infocomm, top telecom players have asked the Telecom Regulatory Authority of India (Trai) to set a floor price for voice and data services, a move, which Reliance Jio opposes.

The move comes ahead of a Competition Commission of India (CCI) ruling that the low tariff offer by Reliance Jio cannot be held as anti-competitive, rather it is an effort by a new entrant to find market for its products.

Trai chairman RS Sharma told reporters on Thursday that the argument the telcos put forward was that any tariff that is lower than the cost of services should be seen as anti-competitive.

''There was an interesting idea mooted by some of the operators for creating a floor or minimum price for voice and data. Some examples of fixed floor pricing by some countries were given, and of course there were contrarian views also,'' Sharma said.

''This is a new idea, we will have to deliberate on it.''

He, however, said while this idea could also form a part of the consultation process currently underway on tariff principles, there needs to be a detailed discussion before that.

''I raised the issue that floor price of a commodity will depend on multiple variables, technology, utilisation of network, volumes, etc. So, it's a complex issue of operationalising this principle,'' he added.

Meanwhile, the Competition Commission on Friday dismissed allegations of unfair business practices made against Mukesh Ambani-led Reliance Jio Infocomm, for the second time in a week.

In their complaint, incumbent service providers Barati Airtel, Vodafone and Idea Cellular have complained mainly on the free services and predatory pricing by the new telecom player.

The CCI had, on 9 June, dismissed similar allegations made by telecom major Bharti Airtel.

''The Commission is of the view that the introductory offers of OP-1 (Reliance Jio Infocomm) do not amount to any contravention of the provisions of the (Competition) Act,'' CCI said in its order dated 15 June and based its conclusions on the earlier ruling in the Bharti Airtel complaint.

To decide the case, the regulator considered 'provision of wireless telecommunication services to end users in each of the 22 circles in India' as the relevant market.

Two individuals filed the complaint against Reliance Jio as well as Department of Telecommunications (DoT), Telecom Regulatory Authority of India (Trai) and Bharat Sanchar Nigam Ltd (BSNL). Since the relevant markets for the two cases were same, CCI extensively cited the previous order in the current ruling.

The market is characterised by the presence of several players resulting in sufficient choice to consumers who can shift from one service provider to another and that too with ease, CCI noted.

''In a competitive market scenario, where there are already big players operating in the market, it would not be anti-competitive for an entrant to incentivise customers towards its own services by giving attractive offers and schemes,'' the regulator noted.

Quoting the previous order, the watchdog also said that such short-term business strategy of an entrant to penetrate the market and establish its identity cannot be considered to be anti-competitive in nature and as such, cannot be a subject matter of investigation under the Competition Act.

Finding no prima-facie evidence of competition norms violations, CCI also rejected the allegations against DoT, Trai and BSNL.

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