TRAI writes to CCI asserting power to deal with predatory pricing in tariffs

Telecom regulator TRAI recently shot off a letter to anti-trust watchdog CCI asserting its power and expertise to deal with matters relating to competition and predatory pricing in telecom tariffs.

Countering Competition Commission of India's contention over jurisdiction on market dominance and predatory pricing, TRAI emphasized that it has the wherewithal to examine all matters —even competition issues — falling within its tariff-related powers, an official said.

TRAI is reviewing rules of tariff assessment, which among other issues, deals with promotional offers and predatory pricing.

The consultation paper in this regard is being widely seen as a flash point between the two regulators. In the 2-page letter to CCI Chairman Devender K Sikri, the Telecom Regulatory Authority of India (TRAI) said that as telecom regulator, its core responsibility is to look at tariffs.

While TRAI has adopted the principle of forbearance, there are reporting requirements involved and the regulator has to ensure competitive behavior is maintained by the all telecom operators in the interest of consumers, TRAI has argued. The provisions of the TRAI Act too require it to facilitate competition and promote efficiency, the official said citing the correspondence.

TRAI has stressed that it has experience and capability to examine all matters, even competitive issues, falling within the purview of tariffs.

The telecom watchdog held that it had earlier in 2006 too initiated a consultation on tariff plans with lifetime validity that had dealt with predatory pricing issues. "TRAI has in the past and will continue to deal with such issues in a careful and nuanced manner," TRAI said in the letter today. The telecom regulator outlined the dynamic nature of the sector and pointed out that special expertise is required to examine complex tariffs, including bundled promotional offers.

In February this year, TRAI had floated a consultation paper on Regulatory Principles of Tariff Assessment. The issues being debated include new measures that need to be prescribed to ensure transparency in tariff offers of telecom operators and strengthening the definition relating to "non- discrimination". TRAI is also debating which tariff offers should qualify as "promotional offers" and the need to limit the number of such offers that can be launched by an operator in a year, one after another, or concurrently.

As part of the paper, TRAI is reviewing the definition and criteria for "dominance" in relevant telecom markets. TRAI, in its letter to CCI, has now said: "Reliance on definition and provisions of the CCI Act in the consultation paper is evidence of TRAI's efforts to interpret the TRAI Act and the CCI Act harmoniously to avoid uncoordinated regulatory intervention." TRAI has also proposed a meeting between the two regulators to deliberate on the matter, if need be.

Issues such as predatory pricing, market dominance and extension of promotional offers have led to some high-decibel public spats between new-comer Reliance Jio and established operators Bharti Airtel, Vodafone and Idea Cellular. The incumbent operators have squarely blamed the aggressive offerings of Jio for their shrinking profitability and revenue squeeze.