Trai's order on predatory pricing may not withstand judicial scrutiny

The regulators - Competition Commission of India (CCI) and Trai - need to ask whether pricing below marginal cost (MC) is fair or unfair, irrespective of which provider is doing so

The Telecom Regulatory Authority of India’s (Trai) recent Telecom Tariff Order (TTO) on predatory pricing (PP) and competition has stirred up a hornet’s nest. Here’s why.
 
In essence, the order stipulates: PP is the act of selling a service below average variable cost (AVC); a telecom service provider (TSP) has significant market power (SMP) if it crosses a threshold of 30 per cent of market share (subscribers or revenue); only a service provider with SMP can be guilty of PP; and, a TSP found using PP will be fined Rs 5 million per plan per licence area.
 
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