India’s CCI clashes with Trai over predatory pricing

This article was authored by Dylan Bushell-Embling, and was originally posted on telecomasia.net.

The Competition Commission of India (CCI) has weighed into the issue of predatory pricing among the nation’s mobile operators, asserting that there is no need for intervention for now.

CCI chairman Devender Sikri said last week that market conditions do not warrant a regulatory intervention to curb predatory pricing, the Economic Times reported.

Sikri was reacting to an order by the Telecom Regulatory Authority of India (Trai) last month introducing a new formula for identifying predatory pricing behavior.

The order changed the definition of significant market power to curb the ability to operators with less than 30% of the market’s total subscribers or revenue to lower tariffs.

The order also abolished volume of traffic and network capacity as criterion for identifying operators with significant market power, and prohibited operators from offering pricing packages to individual subscribers without offering the same plan to all customers.

But the market’s incumbent operators Bharti Airtel, Vodafone India and Idea Cellular have objected to the new regime on the grounds that it favors Reliance Jio Infocomm, the operator responsible for igniting India’s latest price war, and have contested the regulation in the Delhi High Court.

In more welcome news for operators, India’s Department of Telecom has reportedly amended telecoms license norms to allow operators to pay for auctioned spectrum over a 16 year instead of a 10 year period.

The amended rules, which will allow operators to pay their spectrum license fees in up to 16 annual installments, have been introduced in response to the high debt burdens accrued by the market’s mobile operators in recent mobile auctions. The telecoms industry is facing nearly 8 trillion rupees ($122.6 billion) in debt, the Economic Times said.

The DoT has also amended spectrum licensing rules to increase an operator’s total spectrum holding limit to 35% of the allocated spectrum in a particular telecoms circle, up from the previous 25%.

Meanwhile the 50% cap on spectrum holdings in any particular band has been scrapped, but operators will still be prohibited from holding more than 50% of the sub 1-GHz spectrum allocated in a circle.

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Categories: Government Regulations · Other Posts · Wireless