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CCI to conduct study on telecom sector amid changing market dynamics

From time to time, the watchdog commissions studies through independent agencies to gather qualitative as well as quantitative information and insights from market participants and assess the state of competition in a given sector. 

According to the CCI chairman, the new market construct has thrown up many questions such as whether concentration has negated the objectives of competition or the present level of competition is sufficient. (Logo)

Fairtrade regulator CCI will conduct a study about the Indian telecom sector to assess various competition aspects as the market dynamics have undergone significant changes in the recent past, according to its Chairman Ashok Kumar Gupta.

From time to time, the watchdog commissions studies through independent agencies to gather qualitative as well as quantitative information and insights from market participants and assess the state of competition in a given sector.

In an interview to PTI, Gupta said the Competition Commission of India (CCI) has started the preparatory work for the study about the telecom sector and it is expected to commence in November.

“As a market regulator, it would give us insights into what we need to be watchful of, and what we need to do. This, would also enable the Commission to craft a competition advocacy strategy and recommendations tailored to the needs of the telecom sector,” he said.

The country’s telecom sector has witnessed a churn with stiff competition, especially after the entry of Reliance Jio, and the lower tariff regime that has impacted the financials of market players. There has also been consolidation in the market.

Given the criticality of the telecom services and their overarching interface across economy, it becomes imperative for market regulator to keep a close watch on the developments in the sector.

“The telecom market dynamics have undergone a significant change in recent past by way of entry of new player, wave of consolidation, change in competition strategies and business models in the sector,” Gupta said.

According to the CCI chairman, the new market construct has thrown up many questions such as whether concentration has negated the objectives of competition or the present level of competition is sufficient. There are also questions on whether the market power in telecom can be used or misused in monopolising any niche market that essentially depends on telecom services, he added.

The study would gather relevant information and data from the stakeholders to provide a clear understanding of the developments in telecom market.

Besides, it would look at “markets that are closely connected with telecom markets, in terms of the prevailing competition landscape, patterns of consumer and business behaviour, impact of regulatory and policy developments on competition, interplay amongst markets,” Gupta said.

Currently, a study about the e-commerce sector is underway as the CCI seeks to have a better understanding of the e-commerce ecosystems in India, business practices of online platforms and other market participants that avail the platforms’ intermediation services and their implications on competition.

The regulator’s studies about sectors mainly look at the existing competition conditions, the regulatory architecture and the perspective of consumers as well as concerned stakeholders.

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