Trai challenges tribunal’s verdict on pricing in SC
NEW DELHI: A week after a telecom tribunal quashed the Telecom Regulatory Authority of India’s (Trai) rules on predatory pricing and discounted offers, the regulator has appealed the tribunal’s verdict in the Supreme court, arguing that it dismantles the regulatory framework for tariff assessment and places consumers at the mercy of service providers.
The regulator, in an appeal filed on Friday, has also asserted that the tribunal’s judgement hinders it from performing its statutory functions.
The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on December 13 quashed controversial rules on predatory pricing, in a relief for Bharti Airtel Ltd and Vodafone Idea Ltd, which had complained that the rules would benefit rival Reliance Jio Infocomm Ltd.
Trai had set the new rules arbitrarily and without deliberation or effective consultation, TDSAT had ruled. The tribunal rejected Trai’s new definition of “significant market player” (SMP), besides sparing telecom firms from disclosing on their websites segmented offers or tariff discounts aimed at retaining customers.
According to the TDSAT order, instead of reporting all segmented offers/discounts, Trai may call for details of any segmented offer about which it receives complaints.
The tribunal directed Trai to reconsider within six months provisions related to predatory pricing and segmented offers, barring it from imposing any penalty on this count.
“The tribunal has erred in taking the view that it would not be necessary for telecom service
TRAI, IN ITS APPEAL, HAS ALSO ASSERTED THAT THE TRIBUNAL’S JUDGEMENT HINDERS IT FROM PERFORMING ITS STATUTORY FUNCTIONS
providers to disclose details of segmented offers and if there is any other sensitive information which they feel would affect their business interests, they would be at liberty to withhold such information by offering a written explanation to Trai,” the regulator said.
In February, Trai directed telcos to transparently disclose segmented offers and set the penalty for violations at ₹5,000 for every day of delay, subject to a maximum of ₹2 lakh.
Moreover, under the new rules, Trai could examine tariffs of an SMP—AN operator holding a share of at least 30% of total activity in a relevant market— to check for predatory pricing.
The new definition of “total activity” was based on any of two parameters—subscriber base and gross revenue—while an earlier definition included subscriber base, revenue, switching capacity and volume of traffic.
According to other operators, excluding traffic from the definition of SMP would help Jio, which enjoys huge traffic on its network.
While Bharti and Idea approached TDSAT against the Trai rules, Vodafone challenged them in the Madras high court, alleging that the order would result in an unfair advantage to Reliance Jio, as it took away their flexibility to compete and retain customers in a circle in which they are significant market players.
In the appeal, Trai has also said that the tribunal’s judgement grants liberty to private operators to withhold information of segmented offers and discounts provided to existing customers which is against the objectives of transparency and non-discrimination.
Moreover, the verdict quashes the operator’s requirement to disclose such discounts to the regulator which has created an anomalous situation where Trai’s power to regulate tariffs has been made redundant, Trai said in the appeal.