The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on Thursday dismissed some clauses related to predatory pricing that are part of TRAI’s tariff regulation, citing lack of transparency.
“…the impugned Tariff Amendment Order is set aside in so far as it changed the concept of Significant Market Player (SMP), non-predation and the related provisions,” the order, which comes as a big relief for Bharti Airtel and Vodafone Idea, said.
No penalty
The tribunal has also asked the Telecom Regulatory Authority of India (TRAI) to reconsider the provisions within six months. Additionally, following the order, the regulator cannot levy penalty on telecom operators for not complying with the new tariff reporting norms.
“If a new entrant needs to be protected from the rigours of non-predation, it can be done through provisions like “welcome offer” and promotional scheme as availed recently by Reliance Jio,” the order said.
It added that on going through the contents of the consultation and the ultimate decision on this important issue, it was found that the consultation process “was not effective as it stopped with the first round of consultation…”
“Since we have found that there was lack of required transparency in arriving at the concept of SMP, non-predation and average variable cost, it is not necessary to discuss other issues raised by the appellants and noted earlier,” it added.
The tribunal said, “Segmented offers and discounts offered in the ordinary course of business to existing customers without any discrimination within the targeted segment do not amount to a tariff plan and therefore need no reporting in the manner prescribed for regular tariff plan.” It added that instead on reporting of all segmented offers/discounts not falling within the cap of 25 tariffs, TRAI may call for details of any segmented offer about which it may receive complaints.
In its order, TRAI had said that all segmented offers — either for retention or acquisition of new consumers — are to filed with the Authority and be displayed on the operator’s website. The TRAI order had also said that SMP for the purpose of predatory pricing would now be based on just subscriber base and gross revenue as against subscriber base, turnover, switching capacity and volume of traffic earlier.
“As a regulator, TRAI is expected to be aware of the ground realities, the ups and downs faced by the TSPs, reduction in their numbers in recent times and its various reasons. The impugned order does not show application of mind to the relevant objective datas, facts and figures to support the significant changes under the challenge,” the order said.
