Turf war rages between CCI and TRAI over telecom tariffs

A turf war is raging between the Competition Commission of India and the Telecom Regulatory Authority of India over which agency will monitor anti-competitive tariffs in the telecom sector.

After the telecom regulator issued a consultation paper seeking industry comments on the issue, the Competition Commission asked the former to keep off the latter’s turf and refrain from laying down rules on predatory pricing by telecom service providers.

In a July 21 letter to TRAI Chairman RS Sharma, CCI Chairperson Devendra K Sikri said the “issues and questions for consultation relating to delineation of relevant market, assessment of dominance and predatory pricing” are “issues of determination for the Commission.”

Back in February, TRAI published a consultation paper on anti-competitive behaviour in tariff offers.

Industry insiders believe this came about after Reliance Industries commercially launched the Jio network in September 2016 offering both data and voice services free for early subscribers.

The three incumbent telecom players took the fight to the government and to TRAI, alleging that Reliance Jio was indulging in predatory pricing to win market share.

TRAI’s consultation paper asked for the industry’s views so that it could lay down rules on predatory pricing, the need to restrict promotional offers, assess the dominant market position and evaluate whether “the dominant enterprise is resorting to pricing below average variable cost.” TRAI is expected to finalise its regulations in the coming weeks.

However, the CCI’s latest salvo could throw a spanner in TRAI’s plans. Clearly demarcating the jurisdictions of the two entities, CCI’s letter goes on to say that while the “sector regulator creates structural conditions for competition and orderly growth of a sector”, the competition regulator “addresses the adverse effect on competition emanating from the anti-competitive conduct of enterprises, including predatory pricing.”

It added that the sector regulator, meaning TRAI, may not have the “wherewithal for the determination of these issues, as such issues do not afford themselves to blanket prescriptions and the blunt instrument of regulation,” adding that market interactions need to be assessed on a case-to-case basis.

In June, the CCI had rejected a case of alleged predatory pricing against Reliance Jio filed by Airtel. In its ruling, the fair trade regulator said that merely giving access to free services was not in itself anti-competitive.