Trai paper violates 2002 Act, says competition panel

Even as the Telecom Regulatory Authority of India Trai is holding an open house session tomorrow on reviewing licence conditions...

Even as the Telecom Regulatory Authority of India Trai is holding an open house session tomorrow on reviewing licence conditions and capping the number of telecom service providers, the Competition Commission has strongly opposed putting artificial caps on the number of operators. In a letter to the regulator, Competition Commission member Vinod Dhall has said that some of the issues in the consultation paper are at variance with the Competition Act 2002.

In a letter to Trai chairman Nripendra Misra, Competition Commission member Vinod Dhall has noted, 8220;The consultation paper has raised a number of important issues that have implications for matters concerning competition in the telecom markets. Some of the approaches mentioned in the competition paper are at variance with the Competition Act 2002 or even with the generally accepted elements of competition analysis.8221;

Dhall has also raised the relevance of putting any threshold or cap on the number of operators. 8220;In a number of places, the consultation paper takes note of certain thresholds or caps such as 67 per cent marketshare, a cap on the number of service providers in a service area, and a minimum of three service providers in an area. In the light of the provisions of the Competition Act and the current state of telecom markets, it is not clear whether such thresholds/ caps are relevant.8221;

Dhall has also pointed out that availability of spectrum is one of the core issues of the telecom sector. Spectrum is a scarce natural resource and should be efficiently used. Therefore, market-based principles should be used to determine the price of spectrum. He has suggested that Trai should discuss with the Commission issues related to competition before finalising its report.

Large telecom service providers want to prevent entry of new access service providers. They say that no new operators should be allowed to enter as they will become financially unviable if there is more competition. They have also argued that spectrum is limited and, hence, no new licences should be given.