Telcos are Free to Match Reliance Jio’s Aggressive Tariff Plans in their Dominant Circles: Trai

Facing a threat from Mukesh Ambani-led Reliance Jio, established players like Airtel and Vodafone recently complained to Telecom Regulatory Authority of India citing “predatory pricing” by Jio. Trai, however, says they are not stopping anyone from competing from with Jio. Airtel, Idea and Vodafone are free to lower tariffs as much as they want to match or challenge Jio’s aggressive pricing in their dominant circles, a couple of officials two to Livemint requesting anonymity.

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Besides, Trai added if anyone has a problem with their predatory pricing definition, they are free to approach the court. The latest tirade against Jio began after Trai issued a new notification on February 16 as to what constitutes predatory pricing.

Under these new rules, a tariff will be considered predatory in a “relevant market”, if any dominant player or SMP (Significant Market Player) offers services at a price which is below the average “variable cost” with a view to reduce competition or eliminate competition in the “relevant market”.

If the tariff is found predatory, an operator will be liable to pay a penalty of up to Rs 50 lakh per tariff plan per telecom circle.

Trai defined SMP as a telecom operator holding a share of at least 30 percent of total activity in a particular market. For example, Vodafone-Idea is SMP in 12 circles, and Airtel is in 9 according to the subscriber base, while based on revenues, Vodafone is SMP in 13 circles, and Airtel is in 15.

Incumbent operators Bharti Airtel, Vodafone India and Idea Cellular, through COAI, said that the new order takes away their flexibility to compete and retain customers in a circle where they are SMPs. This is because as of right now Airtel and Vodafone-Idea are SMPs in most telecom circles.

The Cellular Operators Association of India (COAI) accused Trai of being partial towards Jio as the new orders appeared “to be strengthening the ambitions of one particular operator with deep pockets and monopolistic designs at the expense of other operators.”

Trai and Jio, in turn, have rubbished COAI’s charges, and the regulatory body clarified that the operators are free to challenge Jio.

“The SMP is free to match a price as long as it can justify it to Trai, that is make a business case with the reasons for bringing down the price. Being an SMP and offering below average variable cost alone would not make your pricing predatory,” said a TRAI official, requesting anonymity to the publication.

Whatever way this goes, this means that a new tariff war is upcoming in the country, as incumbent players rigorously attempt to match Jio’s cheap data prices.

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59 Comments on "Telcos are Free to Match Reliance Jio’s Aggressive Tariff Plans in their Dominant Circles: Trai"

 

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Girish Gowda
March 1, 2018 3:21 pm 3:21 PM

The nation welcomes this move. Good going TRAI.

Priyansh Singh
March 1, 2018 2:53 pm 2:53 PM

On that Post I was talking about this News. I read this news 2 days back so wasn’t ready to believe why Incumbents didn’t like Predatory Pricing.

Faraz
March 1, 2018 2:39 pm 2:39 PM

Well I got today on my mom’s number for 28 days.. but not in our number hope they are giving it slowly to everyone.

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Sonu(SB)
March 2, 2018 6:44 am 6:44 AM

They are giving to all those who are not using Jio since a long as well those who are using small tariff. I am not using Jio since 3 months. My number is not discontinued as on day, infact I got 10GB add on internet twice. But I am not going use Jio anymore.

rahul yadav
March 2, 2018 4:12 am 4:12 AM

I got the same 10Gb Add-on Data on Redmi 5A which Expire on 28 March 18

Airtel User
March 2, 2018 1:39 am 1:39 AM

God bless Jio, its because with such good gestures people love Jio, everyone is getting it irrespective of your recharge.
May Jio rule like this and customers gets world class service and save money in there pockets compared to avoid.

Priyansh Singh
March 1, 2018 10:42 pm 10:42 PM

I think only Samsung Users get this 10 GB Add ON for Free. Not Number Specific but Device Specific.

tri_vis
March 2, 2018 1:19 pm 1:19 PM

I also git 10 GB add-on. Mine is RN4

Rinu
March 2, 2018 4:09 am 4:09 AM

I too got 10 GB free add on activated from backend yesterday valid for 28 days. My device is of Samsung make. So you may be right.

Girish Gowda
March 1, 2018 11:24 pm 11:24 PM

Got it yesterday.

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Girish Gowda
March 1, 2018 11:19 pm 11:19 PM

I think everyone will get this holi offer in stages. Mine is Google Pixel and my dad’s is Redmi Note 4. Both our devices got the 10GB add-on with validity until March 27th.

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