In a relief to old operators, the telecom tribunal TDSAT today granted stay on regulator Trai's rule on reporting requirement of special offers for subscribers and definition of 'significant market power' to determine 'predatory pricing' offered by service providers.
In its interim order, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), however, said the Telecom Regulatory Authority of India (Trai) will be entitled to ask for details of segmented discounts or concessions "for analysis" but that "no penalty shall be imposed on that basis" till further orders in the matter.
"... the clauses in the impugned order related to the reporting requirements and definition of SMP are stayed," a three-member TDSAT bench chaired by Justice Shiva Kirti Singh said in an order granting interim relief to Bharti Airtel and Idea Cellular.
Under the new rules, Trai had said it will impose financial disincentive of up to Rs 50 lakh per circle on operators if their service rates are found to be predatory in nature.
The regulator had said a tariff will be considered predatory if in a "relevant market", a telecom operator with over 30 per cent 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".
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Trai said that the relevant market should be defined based on any of two parameters namely subscriber base and gross revenue, and excluded network capacity and volume of traffic in the criteria.
"The TDSAT order supports the prayer made by incumbent telecom operators. Whole issue of definition of SMP was vitiated by removing two criteria -- network capacity and volume of traffic, in amendment of Telecom Tariff Order by Trai. These changes skewed level playing field for most of the incumbent telecom operators," industry body COAI, Director General Rajan S Mathews said.
Crying foul against Trai's decision, Airtel and Idea had moved TDSAT challenging the predatory pricing rules of the regulator that tweaked the definition of significant market player (SMP).
The tribunal today observed that norms of regulation "have been altered in a significant manner in respect of predatory pricing as well as reporting requirement" and added that issues will have significant impact and ramification.
"... the appellants have expressed deep apprehension that if the reporting requires disclosure of names etc of their customers, or other sensitive commercial information, disclosure of the same may adversely impact their business interests and the rival service providers may gain if they have access to such information," the tribunal said.
It further said that it would not be necessary for operators to disclose the details of their customers or any business-sensitive information, and that they can choose to withhold such information provided they offer a written explanation for the same, to the TRAI.
"If the respondent (TRAI) feels that relevant and necessary information is being withheld without just and good reasons, the matter may be bought to the notice of the tribunal for appropriate directions," the order added.
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