COAI expresses its disappointment regarding TRAI’s tariff order

Expressing its deep disappointment and alarming concern regarding TRAI's tariff order on predatory pricing, Cellular Operators Association of India (COAI) said that these orders seem to be strengthening the ambitions of one particular operator with deep pockets and monopolistic designs at the expense of other operators.

Rajan Mathews, Director General, COAI, said, "All our member operators, with the exception of one, feel deeply victimized and let down. We request the Government to intervene and look into these concerns on an urgent basis and ensure a financially healthy and vibrant telecom industry that is able to support Digital India and serve customers. 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."

The statement comes after Telecom Regulatory Authority of India (TRAI) issued the order on predatory pricing and imposed penalty financial disincentive of up to Rs 50 lakh per circle on operators if their service rates are found to be predatory in nature.

A tariff will be considered predatory if in a "relevant market", a telecom operator with over 30 percent market share offers services at a price which is below the average "variable cost", with a view to reduce competition or eliminate the competitors in the "relevant market", as per an amendment made by TRAI in the Telecommunication Tariff order.

COAI also said that over the past 12-18 months, 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. This has destroyed the financials of an industry which was the poster child of India's reform, with tens of thousands of jobs and tens of billions of dollars of investment at stake.

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The industry is dismayed with a succession of regulatory decisions and recommendations made in recent months that clearly appear to be to the advantage of one operator at the cost of other players. While reducing the mobile termination charge the regulator ignored the adverse impact on the same on rural coverage and on investments made in those areas. This alone lost incumbent operators over 15000 crore rupees per annum and benefited a new operator by nearly 10,000 crore rupees, COAI added.