The telecom tribunal has rejected the sector regulator’s order that had changed the definition of significant market power (SMP) to identify predatory pricing, offering huge relief to India’s incumbent carriers who had said the new rules only benefitted Reliance Jio Infocomm.
The Telecom Disputes Settlement & Appellate Tribunal (TDSAT), in a hard-hitting judgement Thursday, said the regulatory order that gave a new entrant like Jio pricing flexibility till it acquired 30% share of the market’s subscribers or revenue, “appeared an unnecessary abdication of its regulatory powers by the Telecom Regulatory Authority of India” in the context of tariff conditions and their enforcement.
“If a new entrant needs to be protected from the rigors of non-predation, it can be done through provisions like `Welcome Offer’ and `Promotional Offer’ as availed by Reliance Jio, but to allow freedom from requirements of non-predation till acquisition of 30% of total activity in a given market, prima facie appears an extreme step by Trai,” the tribunal said in its verdict.
The tribunal further said, it would be improper to “adopt a definition (read: of SMP) that provides “artificial protection to a telco, who may have the capacity and intent to destabilise the sector through predatory pricing before it attains the defined status of SMP”.
The upshot of TDSAT’s verdict is that older carriers Bharti Airtel and Vodafone Idea can continue offering customised discounts to retain subscribers and won’t be bound to report those to the regulator or make it public. Besides, Jio too will be as accountable to be called out for predatory pricing as its two incumbent rivals, with the removal of the 30% subscriber or revenue market share criteria.
The tribunal has asked the sector regulator to reconsider the provisions of its predatory pricing regulation within six months.