TRAI issues consultation paper to curb telcos' predatory pricing, promotional offers

To address the issues like predatory pricing and promotional offers by telcos, Telecom Regulatory Authority of India (TRAI) has released a consultation paper on Friday.

With the consultation paper, the telecom regulator has also asked the views on non-discrimination and transparency in advertising tariffs. TRAI has sought comments from stakeholders by March 17 and counter-comments by March 24.

This announcement comes at a time when telcos, such as Bharti Airtel, Vodafone and Idea Cellular, have filed a complaint against Reliance Jio promotionl offers in Telecom Disputes Settlement and Appellate Tribunal (TDSAT).

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TRAI in its paper said that "the Authority has issued several directions and guidelines in order to ensure transparency in tariff offers to protect the interests of the consumers of telecommunications services. However, despite various measures taken by the authority to ensure transparency in tariffs, the authority has been receiving complaints from consumers and consumer organizations highlighting, inter-alia, issues concerning transparency in the tariff offers of telecom service providers."

Trai said that that there is a need to review potential anti-competitive practices that could possibly harm the sector and consumers; set out clearly defined standards of competitive conduct; and explore appropriate regulatory tools to address such concerns. "Anti-competitive behavior in context of tariff setting can be through predatory pricing by the dominant market player," it added.

"The concept of "promotional Offer" was first addressed by TRAI on 19th June 2002 through an advisory issued to all telecom service providers wherein TRAI advised service providers to restrict the validity of promotional packages and/or the benefits offered to customers under such packages on offer to a maximum of 90 days from the date of launch. This letter was issued in the context of telecom service provider offering promotional packages to their customers as a marketing strategy where the validity of such schemes ranged from 15 days," TRAI further added.

Meanwhile, Rajan Mathews, director general of the Cellular Operators Association of India (COAI), said the issues raised in the paper were "very pertinent to the industry at this point of time."

"Authority will continue to monitor the tariffs both with respect to predatory tariffs, as well as, unduly high tariffs because operators with dominant market
presence and operations in more than one service sector will always have the capacity to do so," TRAI said.