Vodafone chief criticises Trai’s new rule
British telecom major Vodafone on Monday termed the Telecom Regulatory Authority of India’s (Trai) new rule on predatory pricing “unfair”.
He said that the company has lost 80 per cent business in India due to data rates war fuelled by a new competitor in the market (Jio). “Out of the blue, magically, a law or regulation comes ... You have to fight somebody with hands tied at the back. So, we are not in agreement with that specific regulation,” said Vittorio Colao, global chief of CEO of Vodafone Group. He was responding to a query on predatory pricing norms issued by Trai.
Under the new rules, Trai will impose a financial disincentive of up to ~5 million per circle on operators whose service rates are found predatory in nature.
A tariff will be considered predatory if in a “relevant market”, a telecom operator with over 30 per cent market share offers services at a price which is below the average “variable cost”, with a view to reduce competition or eliminate the competitors in the “relevant market”, as per an amendment made by Trai in the Tariff order. When asked if he considers that the latest rule favours new players and if the company will challenge it, Colao responded affirmatively.
“Out of the blue, magically, a law or regulation comes ... You have to fight somebody with hands tied at the back. That’s (rule) not fair ... we want fair competition. So, we are not in agreement with that specific regulation”