HC refuses to interfere in TDSAT's stay on Trai predatory pricing orders
05 May 2018
In a setback to the Telecom Regulatory Authority of India (Trai), the Delhi High Court on Friday declined to stay the interim relief provided by the telecoms tribunal TDSAT to older or incumbent operators from reporting segmented offers to the regulator.
The high court upheld the stay on Trai’s recent order which changed the definition of significant market power (SMP) needed to identify predatory pricing, and which also required telcos to report all tariff plans.
Trai had challenged TDSAT’s interim order of the in the Delhi High Court, seeking its quashing or stay.
On 24 April, the Telecom Disputes Settlement and Appellate Tribunal put an interim stay on Trai’s new regulation which defined predatory pricing by giving a new definition of significant market power (SMP) and sought to end segmented offers to consumers (See: Relief for old telcos: TDSAT stays Trai move on SMP, special offers).
Trai in its order stayed by TDSAT had among other things dropped parameters such as volume of traffic and switching capacity from the definition of SMP, thus giving pricing flexibility only to operators with less than 30 per cent of the market’s subscribers or revenue.
Bharti Airtel and Idea Cellular had challenged Trai’s order in the TDSAT, saying it violated their rights to conduct business.
The HC bench, headed by Justice Rajiv Shakdher, on Friday declined to consider Trai’s plea since it was against an interim order.
This means that Bharti Airtel, Vodafone India and Idea Cellular can continue to offer any tariff plans irrespective of their revenue and subscriber market share without being penalised as predatory by Trai.
The court said it could expedite the final hearing of the appeal filed by Airtel and Idea before TDSAT and also left it to the telecom tribunal to make any changes to the interim stay order. The date of TDSAT’s next hearing is not known yet.
Trai filed the petition against TDSAT’s interim stay order earlier this week and the regulator argued that if operators did not report their tariffs, it will lead to discrimination and lack of transparency.
New entrant Reliance Jio Infocomm too was reportedly a party to this matter and backed Trai’s argument, saying that if all price plans were not stated, then the customer remained unaware of discounts available to them. Jio said it was the only operator adhering to Trai’s rules of making all its tariff plans public on the website and added that others, by offering specialised discounts to subscribers who want to migrate, were preventing them from porting out.
The regulator also told the court that TDSAT did not explain why it stayed the order.
While reporting its quarterly results, Jio had said it was “strongly against segmented offers” and that the industry was not functioning transparently by offering one tariff plan to one customer and another one in the same price range to a second subscriber.
Representatives of Bharti Airtel and Idea argued that the regulatory regime had changed and Trai’s new rules were tailor-made to suit Jio and were against consumer interests. These companies also pointed out that TDSAT was yet to give a final order and the matter would be heard by the tribunal again for final discourse.
According to the older operators, the regulator had dropped ‘volume of traffic’ and ‘switching capacity’ in its new definition of SMP, while continued with ‘larger subscriber base’ and ‘turnover’, thereby creating a category applicable only to them and not Jio.
P Chidambaram represented Bharti Airtel in the court while Darius Khambatta argued on behalf of Idea Cellular. Additional solicitor general Tushar Mehta and Sandeep Sethi represented Trai while Ramji Srinivasan argued on behalf of Jio.
Trai’s 16 February tariff order that changed the definition of SMP meant Jio — with some 15 per cent share of revenue and users — would not be called out for predatory pricing, but Bharti Airtel and the proposed Vodafone-Idea Cellular combine would, as they each have over 30 per cent revenue market share. The changed rules included a penalty of Rs 50 lakh per violation if a tariff was found to be predatory.
Bharti Airtel and Idea approached the tribunal against the Trai tariff order on 4 March. Vodafone India had earlier moved the Madras High Court and got interim relief against the reporting requirement of segmented tariff offers.