India’s major telecom operators and Reliance Jio have been engaged in a bitter tariff war since September 2016. Jio’s 4G service has been a success with over 160 million customers, and the service has turned profitable in less than a year after starting paid service.
Now, India’s old carriers have slammed TRAI for a series of regulations introduced during the past 12-18 months. The carriers say that the new regulations introduced during the past year have only favored the new entrant Reliance Jio at the cost of incumbent operators. However, Reliance Jio has condemned the comments against the regulator, and has said that the process has been fair and warned of legal action.
The Cellular Operators Association of India (COAI) called on the government to urgently intervene, saying that regulations and policies that were not based on fair play would further aggravate the financial stress in the industry. It said that the latest tariff order on predatory pricing violated the fundamental right of incumbents to carry out business.
“For some reason, these (TRAI) orders seem to be strengthening the ambitions of one particular operator with deep pockets and monopolistic designs at the expense of other operators… regulation after regulation put out by TRAI has ended up in distorting the competitive landscape in favor of one operator, while putting all other operators at a serious disadvantage,” COAI said in a statement on Tuesday.
ET reports that Reliance Jio did not subscribe to these views of the body. Since the launch of Jio’s 4G service, the incumbents have seen a hit in their revenue and have faced further pressure in recent quarter due to cut in interconnection charges.
COAI members excluding Reliance Jio will decide over the next few days whether to move court against TRAI’s amendment to the Telecom Tariff Order (TTO), while Reliance Jio says that COAI’s allegations against the new entrant is unsubstantiated and baseless.
TRAI amended its tariff order on Friday saying that predatory pricing henceforth will be determined based on average variable cost, and whether there is a specific motive on the part of the carrier to reduce or kill competition. COAI is also openly referring to Jio being the initiator of predatory tariff plans in the country.
It is clear that Jio has grown at the expense of incumbents like Bharti Airtel, Vodafone and Idea Cellular, and it is obvious that these operators will hit back whenever possible. It remains to be seen where this infighting leads all of them, and what it holds in place for the telecom subscribers.