Trai notice to Bharti Airtel for not complying with tariff norms
New Delhi: The Telecom Regulatory Authority of India (Trai) has pulled up Bharti Airtel Ltd for failing to comply with tariff reporting requirements by not informing it about certain segmented tariffs offered to consumers to retain them.
Trai has sought a reply from the telecom operator within 10 days.
In a letter dated 15 March, Trai has sought responses from Airtel to queries ranging from circle-wise launch date of these tariffs, criteria for classification of consumers availing these tariffs and whether these were reported to the regulator.
Trai has also asked Airtel to furnish circle-wise data of consumers who have opted for these tariff offers and the benefits that accrue to them. Mint has seen a copy of the letter.
“The regulator had earlier written a letter to Airtel on 23 February regarding the same after it received complaints from operators and consumers about 20-odd segmented tariffs. Airtel tried to delay its reply and said other operators were also doing it (offering segmented tariffs). Now Trai has given them 10 days to reply,” a person familiar with the matter said, requesting anonymity.
When contacted, Airtel confirmed that it has received the notice. “The matter is sub judice and pending in the TDSAT”, it said.
Operators are required to report any new tariffs to Trai within seven working days from the date of their implementation after conducting a self-check to ensure the tariffs are transparent, non-discriminatory and non-predatory.
Trai’s rules also restrict operators from offering segregated or segmented offers or plans to retain customers, by making sure that all tariffs are displayed on a company’s website
The new norms on pricing released by Trai on 16 February also state that in case of violation of tariff reporting requirements, an operator can be penalised Rs5,000 for every day of delay, subject to a maximum of Rs2 lakh.
Under the new tariff order, Trai said it will also examine tariffs of a significant market player (SMP)—which is an operator holding a share of at least 30% of total activity in a relevant market—to determine the existence of predatory pricing by looking at whether the tariff is below the firm’s average variable cost over a certain period, and whether the operator has an intent to drive out competition. If the tariff is found predatory, an operator will be liable to pay a penalty of up to Rs50 lakh per tariff plan per telecom circle.
Incumbent operators have alleged that the change in Trai’s definition of “total activity” will result in an unfair advantage to Reliance Jio Infocomm Ltd, which enjoys huge traffic on its network. The new definition of “total activity” is based on any of two parameters—subscriber base and gross revenue—while an earlier definition included subscriber base, revenue, switching capacity and volume of traffic.
“These parameters were a part of Trai’s own criteria in the past. As a result, victims have now been made the perpetrators. In a cruel twist of fate, one operator, who by its own admission is the world’s largest data network, may be free to offer any sort of predatory tariffs, while older operators are now subject to regulation and cannot compete without falling foul of a new definition of what constitutes predatory pricing,” Rajan S. Mathews, director general of lobby group COAI (Cellular Operators Association of India), said in a statement on 20 February.
Incumbent operators Bharti Airtel and Idea Cellular had on 5 March approached TDSAT for a stay on Trai’s new tariff order. The tribunal has refused to grant an interim stay and given Trai three weeks to file its reasons on why the new tariff order should not be stayed. TDSAT has also asked Airtel and Idea to file their replies two weeks after that. The next hearing is on 17 April.
- Marico’s Harsh Mariwala: Innovation can spur creation of successful Indian brands
- TCS doesn’t believe in sacrificing profitability to drive growth
- ‘100 million Paytm users have completed KYC’
- Realty funds face uphill task in raising, deploying capital for projects
- Advent-backed ASK Group is working on a $250 million IPO