Cell firms object to Reliance pricing

Cellular operators have urged the Telecom Regulatory Authority of India (Trai) that the regulator direct Reliance Infocomm to "withdraw its predatory tariff plans".

This is because the cellular operators Reliance Infocomm's tariff plans violate the Trai's orders, the operators have said.

In a letter to Trai, the Cellular Operators' Association of India (COAI) said 'Plan 700' of Reliance Infocomm offered unlimited talk-time to Reliance phones across India, and 'Plan 435' offered unlimited talk-time across Chennai, Kolkata and Mumbai, in violation of the regulator's 33rd Amendment to TTO 1999.

"It is submitted that these tariffs are predatory as the same tariffs and rates are not transparently available to the other access providers, who are its (Reliance Infocomm's) competitors. We believe that by offering such tariffs, Reliance Infocomm is squeezing the margins of it competitors as it has lowered its retail tariffs of competitive services in the downstream market whilst not extending this facility to its competitors for wholesale prices (carriage charges) in the upstream market," the letter said.

"We hereby seek intervention of the Trai to direct that the the predatory tariff plans are immediately withdrawn," the letter added.When contacted, Reliance Infocomm executives refused to comment.

Although the Trai had earlier clarified that that vertical price squeeze was a recognised anti-competitive practice, it had also said if the retail price was lower than the (wholesale) price offered to operators, it would intervene as such vertical squeeze unfairly limited competition.

COAI has also pointed that the regulator's orders said that "any differential tariff assuming the nature of vertical price squeeze would not be permitted".

The Trai has also stipulated that service providers conduct a self-check of existing tariffs in view of its guidelines, and if any tariff scheme is found inconsistent with these guidelines, it must immediately be withdrawn, the COAI added.