Following a slugfest last year between incumbent telecom operators — Bharti Airtel, Idea Cellular and Vodafone India — and the newcomer Reliance Jio over alleged predatory tariffs offered by the latter, the Telecom Regulatory Authority of India (Trai) issued new regulations saying it will impose financial disincentive of up to Rs 50 lakh per circle on operators if their service rates are found to be predatory in nature. “In case of tariff being found predatory, the service provider shall, without prejudice to the terms and conditions of its licence . or directions issued, there under, be liable to pay by way of financial disincentive an amount not exceeding Rs 50 lakh per tariff plan for each service area as the Authority may by order direct,” Trai said The regulator said in the Telecommunication Tariff Order issued on Friday that a tariff will be considered predatory, if, in a “relevant market”, an operator with over 30 per cent market share offers services at a rate that is below the average “variable cost”, with an aim to reduce competition or monopolise the said “relevant market”. The definition of “relevant market” will be decided by Trai based on the relevant product against which it receives a complaint. It also said that it will arrive at the figure of “variable cost” after deducting fixed cost and share of fixed overheads borne by the company from total cost of incurred by it for running business during the period under review. In a press note, Trai said that it had held a meeting with the top management of telecom operators on June 15, 2017 on the issue of setting some form of floor price for retail tariff. This was followed by another meeting a month later with the telecom service providers on July 21, 2017 on the same issue, wherein, Trai said that the majority of the industry’s representatives called for the regulator to not undertake fixation of floor price and that the rate of interconnection usage charge should not be taken as the floor for retail tariff. “The issue pertaining to Tariff Assessment and the respective regulatory framework is an individual operator issue, based on their own business models. COAI (Cellular Operators Association of India), did not participate in the consultation process and no submission was made to Trai. While, COAI, doesn’t comment on tariffs and individual operator issues, it will review the order and determine if our members wish to respond through COAI,” director general Rajan S Mathews said. Trai also said that telecom operators will have to provide services to all subscribers availing the same tariff plan in a non-discriminatory manner.
