Supreme Court admits Trai plea against TDSAT predatory pricing order

The Supreme Court on Monday agreed to hear Telecom Regulatory Authority of India's (TRAI) plea challenging Telecom Disputes Settlement and Appellate Tribunal’s (TDSAT) order quashing the former's rule on predatory pricing for lack of transparency. The top court has issued notices to Bharti Airtel, Vodafone India and Reliance Jio Infocomm and sought their responses on the issue. The TDSAT had on December 14 last year set aside TRAI’s February 16 order and said that it was unnecessary abdication of its regulatory powers in context of tariff conditions and their enforcement.

"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 Offer’ as availed by Reliance Jio, but to allow freedom from requirements of non-predation till acquisition of 30% of total activity in a given market, prima facie appears an extreme step by TRAI," TDSAT had said in its order. TRAI had on February 16 last year released new rules to check predatory pricing. According to the new rules, the regulator had barred operators with over 30 per cent market share from offering services at a price which was below average cost of service to reduce competition or eliminate the competitors. The regulator had also said that operators would have to provide services to all subscribers availing the same tariff plan in a non-discriminatory manner.

In its order, TDSAT had also said that it would be not be right to “adopt a definition…that provides artificial protection to a telco, who may have the capacity and intent to destabilise the sector through predatory pricing before it attains the defined status of SMP (significant market player)”.