TRAI will soon come out with a checklist on predatory pricing

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The Telecom Regulatory Authority of India (TRAI) will soon issue a checklist for service providers to determine whether their tariff offerings are predatory or not, the Indian Express reported.

TRAI Chairman, RS Sharma told IE, “It will have points such as: Are you a significant market player? Are you offering tariffs below variable cost? If the answers to both these questions are in positive, then they’ll have to give the reason behind it, which could be to match their competitor’s tariff, or doing a promotional measure.”

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had ordered the regulator to issue “clear guidelines and benchmarks” for the telecom operators to self-examine their consistency with the rules of IUC compliance and to disseminate relevant data in the context of predatory pricing.

Recently, TRAI has faced heavy criticism from telecom players for the Telecom Tariff Order it issued last month, which restricts the top telecom operators (with over 30 percent market share) from offering lower prices below the average variable cost, only to “reduce competition or to eliminate competitors”.

Many telecom operators unhappy with the order approached the TDSAT which refused to grant a stay on the order of predatory pricing last week. TRAI has been asked to make its submission justifying the order in court on April 17.

Rajan Mathews, Director General of the Cellular Operators Association of India, a body representing the mobile companies of India had commented on the order, “All our member operators, with the exception of one, feel deeply victimised and let down…An environment of regulation and policy that is not based on an equal footing will further aggravate the deep financial stress and kill future investments, innovation in an industry that has put India on the global map.”