Legal challenge to Trai order only option, says Sunil Mittal

BARCELONA: India’s top carrier Bharti Airtel is likely to challenge the telecom regulator’s latest order on predatory pricing in the courts, chairman Sunil Mittal said, on the grounds that the order prevented the telco from rightfully keeping its customers and conducting its business.“We have heard Trai's response and since the order binds us from conducting our business in an orderly manner, I cannot envisage anything other than a legal challenge to counter this order,” Mittal said on the sidelines of the Mobile World Congress in Barcelona, citing Article 14 of the Constitution.“We will agitate at appropriate forums to as we must be provided with the right to conduct our business in an orderly manner,” Mittal said further, adding that a telco cannot be in the market with its hands tied.Mittal’s statement follows those of Vodafone Group CEO Vittorio Colao, who called out the telecom regulator’s new regulations on predatory pricing as favouring Reliance Jio Infocomm, and said it should be legally challenged.Colao said that the regulatory environment in India continued to be “too complicated” and decision-making still slow, but Vodafone will continue to compete here through its merger with Idea Cellular, which he said was on track. On February 16, Trai fixed a penalty of Rs 50 lakh per circle for every tariff plan that is found to be predatory, which it said will be determined on the basis of average variable cost of the carrier and whether there is specific intention on the carrier’s part to reduce or kill competition. The regulator will however examine the issue on a case by case basis depending on the complaint it receives and it will be up to the telco to show that the tariff is not predatory.Trai also changed the definition of SMP to a player having more than 30% share in ‘relevant market’ by either subscriber base or gross revenue. Earlier, the parameters that made up SMP included two other factors of volume of traffic and switching capacity. Importantly, the regulator said telcos will have to do away with segregated offers or those provided to retain subscribers, thus making sure that all subscribers avail the same tariff plan.Incumbent telcos said the order favoured only one player – Reliance Jio – at the cost of others, and they would not be able to compete without falling foul of a new definition of what constitutes predatory pricing.“After all, if you are my customer, I must have right to hold you back and this Trai order binds us from conducting our business in an orderly manner,” Mittal said.“Nothing can be worse than free services. We faced nine months of free services from the new operator. We will face this one too,” he added.

from The Economic Times http://ift.tt/2oyFARG