We don146;t like competition: TRAI

Competition was supposed to be about the customers getting the best price, about the interplay of market forces, right? Well, if you go by t...

Competition was supposed to be about the customers getting the best price, about the interplay of market forces, right? Well, if you go by the Telecom Regulatory Authority of India8217;s TRAI latest moves, the regulator prefers the old-style one-price-for-all-customers approach. Once again, the reason for the regulator8217;s directives appear to be to protect the interests of state-owned firms that are getting hurt in the bargain.

Here8217;s how it works. Today, in various states/cities where they operate, private sector telecom providers have been approaching top customers of the state-owned BSNL/MTNL, and are offering them discounts, to get them to switch. What the TRAI has now asked for, is that these discounts be notified, or filed, with them. The TRAI has asked all basic phone operators to provide 8216;non discriminatory8217; tariffs to all customers. In other words, if you8217;re giving a discount to one customer, you have to give it to all.

Never mind that this flies in the face of normal free-market principles 8212; that you give special prices to larger customers. The hotel industry, it is well known, for instance, gives different discount rates to corporates who book a larger number of room nights, or sometimes just because of the prestige attached to having that corporate as your client. Travel agents, similarly, routinely give different discounts to different users.

So far, private companies in basic phone services are restricted only to a few states like Madhya Pradesh, Andhra Pradesh, Rajasthan, Haryana, Delhi, Punjab, Maharasthra and Gujarat. In these states, due to competition between private operators and MTNL/BSNL, large customers have been getting larger discounts from various private operators.

As per the new decision of the TRAI, companies would now be required to inform the TRAI on what discounts they were offering to their consumers and who these consumers actually were. Earlier, on June 13, the TRAI stated that all telephone companies would have to restrict their tariff packages to a maximum of 25 plans 8212; this, it was argued, was a bid to help consumers who have often been confused between the various tariff packages offered by telephone companies.