Reliance Jio’s Predatory Pricing: Now, Airtel Approaches CCI With Complaint!
After TDSAT (Telecom Disputes Settlement and Appellate Tribunal) dismissed Airtel’s plea accusing Reliance Jio of “predatory” pricing, the country’s leading telecom operator has now filed a complaint with CCI (Competition Commission of India) in hopes of getting some respite.
Airtel in its complaint accused Reliance Jio Infocomm of “abusing dominant position” and “predatory pricing” with the intention of killing the competition. Airtel explained that Jio is a dominant player in the telecom space as “it is a subsidiary of Reliance Industries Ltd. (RIL), which is the largest enterprise in India in terms of size, revenue, assets, and value.”
Airtel mentioned that Jio has made investments of over Rs. 1.6 lakh crores while spending a huge amount of Rs. 47,000 crore on spectrum alone.
Jio is abusing its dominant position by indulging in predatory pricing since its very launch of its beta testing in December 2015. Jio added about 5 million subscribers in its testing phase and had about 72.4 million subscribers until December 31; post its commercial launch on September 5 2016.
“The free service provided by Jio is predatory in nature, which, in accordance with Section 4 of the Competition Act, ex-facie constitutes abuse of dominant position,” Airtel explained in its complaint.
No Other Telco In The World Is Offering Free Services, Airtel Argues
Airtel argues that no other telecom operator in the world is offering its free services (free data and unlimited voice calling). What Jio is offering is predatory in nature with the objective of eliminating the competition and creating a monopoly for itself.
“It is a strategic business tactic adopted to enhance market power with the objective of eliminating competition, in which it has succeeded to a large extent during the quarter October to December 2016,” Airtel complained.
When Jio grabs a higher market share, it might increase the tariff rates and thus exploit the mobile customers in the country.
“Once Jio obtains higher market share, it would likely increase costs or even charge for voice calls since competition will be limited and the customer will be left with lesser number of service providers to choose from,” said Airtel.
Airtel Is Trying To Divert Attention From Its Own Wrongdoings: Jio
In a reply to Airtel’s complaint, Reliance Jio mentioned that the market leader is trying to divert the attention of the media from its violation of rules. Reliance Jio is also accusing Airtel for not providing adequate PoI (Points of Interconnection) which is resulting in call failures and poor customer experience on its 4G network.
“All tariff plans of Jio have been found to be non-predatory by the regulator, so the question of our offerings being predatory does not arise,” said Jio in a statement.
Jio is further blaming Airtel of acting against customer interests by opposing its free benefits.
“India’s telecom sector has tended to progress due to disruptive innovation brought in by a newcomer, but unfortunately, the incumbents led by Airtel have always tried to block such initiatives,” Jio added.
It is interesting to note that Airtel is terming Reliance Jio as a dominant player based on its association with RIL, when Airtel itself is the market leader in Indian wireless telecom industry.
While it is true that no other telecom operator in the world is offering free services for such an extended period of time, but blocking calls (by not providing adequate PoIs) is not a good practice either. Now the matter rests with the CCI and we will know the outcome very soon.