Reliance Jio: Trai official says predatory pricing doesn’t apply

Trai declines to look into Airtel’s allegation that Reliance Jio was offering predatory prices to lure customers.


When Reliance Jio announced tariff plans earlier in September, it said its services would be free till the end of the year. Photo: Aniruddha Chowdhury/Mint
When Reliance Jio announced tariff plans earlier in September, it said its services would be free till the end of the year. Photo: Aniruddha Chowdhury/Mint

New Delhi: In a setback to market leader Bharti Airtel Ltd, the telecom regulator has declined to look into Bharti Airtel’s allegation that Mukesh Ambani’s Reliance Jio Infocomm Ltd was offering “predatory” prices to lure customers.

The move comes a day after Bharti Airtel chairman Sunil Bharti Mittal requested the Telecom Regulatory Authority of India, or Trai, to intervene in the matter.

“I don’t think it applies in this case,” a Trai official said, adding that predatory pricing is usually done by a company that has maximum market share.

“The issue of predatory pricing is usually done by dominant players in the market in a competitive scenario, however, if someone complains about Reliance Jio, then Jio is not a dominant player in the market,” the official said, requesting anonymity. Trai will refrain from regulating tariffs, the person said.

Mittal, who met Trai chairman R.S. Sharma on Wednesday, declined to share details of the meeting, but maintained Reliance Jio has adopted a strategy of “predatory pricing” and Bharti Airtel won’t resort to such policies.

He was speaking to reporters after meeting Sharma. He also said any telecom firm with a strong balance sheet has the capacity to indulge in predatory pricing.

On the issue of interconnect points, Mittal said it was a non-issue and claimed Bharti Airtel has already issued around 2,100 points of interconnection (PoIs). There was a demand note from Reliance Jio for 1,000 more PoIs on Tuesday, he added. “The process is going on. We are opening PoI at great speed, we have to balance traffic and take care of our customers as well.”

The Trai official cited above said there cannot be a situation where an operator is being denied PoIs and that the regulator is taking cognizance of the matter.

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“PoI is the main heart of the telecom system, any network. Interconnection is the most important part of the telecom network, and so, this is something that is extremely important even from our perspective. Our question is outcome based; customers should not suffer due to call  congestion,” he said. “My sense is this is not the way to compete; operators may want to fight in a market place on tariffs and other issues.”

Trai had on 19 September asked telcos to submit data regarding congestion on networks and PoIs to the authority within two days.

The controversy surrounding PoI began after telecom industry lobby Cellular Operators Association of India took the matter of asymmetric traffic and disguised commercial operations as tests to telecom department and Prime Minister’s Office, even accusing Trai of being biased as it issued a consultation paper on reducing interconnection usage charges to favour Reliance Jio.

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