TRAI To Telcos: Feel Free To Match Jio’s Aggressive Pricing With Your Own Tariff!
TRAI has also said that if anyone has any issue with their predatory pricing definition, then they are free to approach the court.
As February draws to a close, tariff war within Indian telecom companies has become intense. With market disruptor Reliance Jio on one side and all other telcos on the other, it is becoming an interesting battle of wits.
TRAI, which is the referee in this fight, has thrown open the battlefield, by saying that they are not stopping anyone from competing against Jio.
This has made the tariff war even more interesting.
Besides, TRAI has also said that if anyone has any issue with their predatory pricing definition, then they are free to approach the court.
What will be the future now?
TRAI To All Telcos: Match Jio’s Pricing If You Can!
On February 16th, TRAI had issued a notification, which described predatory pricing. As per that, any dominant player in any circle would be closely observed for their tariff rates, and Average Variable Cost would be considered to figure out whether their pricing is predatory or not.
COAI, an association of all telecom operators except Jio, considered it as an attempt to help Jio grab more market share.
This is because, right now, Airtel and Vodafone-Idea are the dominant players or Significant Market Players (SMP) in most of the telecom circles in India. As per subscriber count, Vodafone-Idea is SMP in 12 circles, and Airtel is in 9, while based on revenues, Vodafone is SMP in 13 circles, and Airtel is in 15.
After complaints from COAI, TRAI has clarified that other telcos are free to match the pricing, as long as it doesn’t drive away the competition.
A TRAI official said,
“For example, if Airtel is a significant market player in a circle then its actions have to be watched. If Jio comes with an aggressive tariff in that circle then customers will flock to Jio. Any rational service provider will try to match it. The mere act of matching the Jio price cannot be considered predatory because it is reactive. But if you are doing it to drive out competition then it is predatory.”
This means that a new tariff war is about to start in the country, with existing players rigorously attempting to match Jio’s cheap data prices.
TRAI To Telcos: You Are Free To Approach The Court
Meanwhile, after COAI threatened to approach court against TRAI’s definition of predatory pricing, which as per them is supporting Jio, TRAI has given a strong reply
TRAI Chairman RS Sharma said that India is a free country, and anyone can approach judiciary for getting justice.
“Ours is a free country where every individual or entity has a right to seek legal remedies. If somebody is aggrieved with the tariff order, challenging it before appropriate forum will be the right approach,”
Under the new definition of predatory pricing, a fine of Rs 50 lakh per tariff plan has been devised if TRAI finds them as predatory.
Clearly accusing TRAI of being partial towards Jio, COAI has said that the new predatory rules by TRAI “seem to be strengthening the ambitions of one particular operator with deep pockets and monopolistic designs at the expense of other operators”
In response, Jio has asked COAI to tender an apology and has also threatened to file a defamation case.
We will keep you updated, as more twists are expected in this plot.