oppn parties TRAI Should Withdraw Amendement on Predatory Pricing

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  • Mobile operators Vodafone-Idea and Airtel decide to raise tariffs from next month
  • Sharad Pawar meets Sonia Gandhi and says more time needed for government formation in Maharashtra
  • Justice S A Bobde sworn in as the 47th Chief Justice of India
  • Supreme Court holds hotels liable for theft of vehicle from their parking area if parked by valet, says "owner's risk" clause is not a shield from such liability
  • Finance Minister says she is receiving feedback from many sectors that recovery is happening as there is lower stress
  • Sabarimala temple opens, but police bar the entry of women below 50 years
  • Finance Minister Nirmala Sitharaman says Air India and BPCL to be sold off by March
  • Media person Rajat Sharma resigns as DDCA president
  • Shiv Sena, NCP and Congress postpone meeting the governor of Maharashtra
  • Shiv Sena not to attend the NDA meeting on 17th November, says break up "a formality"
  • Shiv Sena says that the confidence the BJP is showing about forming the government in Maharashtra is based purely on its expectation of getting numbers through horse trading
  • Anil Ambani resigns as director of the bankrupt Reliance Communications
  • India beat Bangladesh by an innings and 150 rums inside three days in the first Test. Indian pacers excel after Mayank Agarwal's double century
  • Sena-NCP-Congress work out a common minimum programme, will form the government soon and it will last 5 years, says Sharad Pawar
  • Income Tax Appellate Tribunal upholds the decision to withdraw the charitable status of Young India, making it liable to pay Rs 145 in income tax. Rahul Gandhi and Priyanka Vadra are the majority shareholders in the company
Two Muslim litigants in Ayodhya refuse to accept the Supreme Court order, say review petition might be filed
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TRAI Should Withdraw Amendement on Predatory Pricing

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
There are several flaws in the latest amendment by TRAI to its previous tariff order. First, in the absence of a clear definition of predatory pricing, how will it be decided what constitutes one? Established players can choose to milk consumers and a new entrant can slash margins taking the benefit of advanced technology to offer better services at lower prices. Can it be called predatory pricing? After all, the consumer is benefiting by getting better service at a lower rate.

Take the example of Jio. It entered the market with the then latest 4G technology by building up a network from scratch. It is well known that 4G offers packetized calls that heavily reduce the burden on the network. The existing operators did not upgrade (some of them have still not upgraded) and still allow calls on the 2G network. It entails heavy usage of the network, resulting in higher operating costs and inefficient service through call drops and other network issues. Hence, instead of crying hoarse about Jio’s predatory pricing, they should have converted all their users to the latest technology to offer the same service at the same or even better price.

But what TRAI now seeks to do is the opposite of what it has been doing till now to bring a semblance of sanity in the highly competitive sector. It seeks to prevent existing players having market share of more than 30% by either customer base or gross revenue from indulging in predatory pricing. But isn’t predation normally the line adopted by a cash-rich new entrant? Hence, this amendment immediately opens TRAI to the charge that it is trying to help Jio ward off competition. Vodafone CEO Vittorio Colao has already alleged so.

Further, predatory pricing and abuse of a dominant position in any sector are subject matters for the Competition Commission of India (CCI) to deal with. TRAI is exceeding its brief by entering this field. It can set tariff and regulate the market. But if any company is abusing its dominant position, the CCI will have to step in rather than TRAI. Overall, this latest amendment to the tariff order is discriminatory, anti-consumer and beyond TRAI’s jurisdiction. Hence, it should withdraw the amendment.