TDSAT Digressed TRAI’s Rule on Predatory Pricing: a ray of good news for Airtel, Vodafone, Jio, Reliance

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Telecom Disputes Settlement and Appellate Tribunal finally decided to digress or take out Trai’s rule of Predatory Pricing on December 13th, 2018. Predatory Pricing or sometimes known as Undercutting by the Telecom tribunal is a strategy which regulates the price of products, generally stoop it down, so that new customers or buyers are attracted and this pricing policy is sometimes used to clear out any unhealthy competition in the market by driving out the competitors from the arena of buying and selling products.

“The impugned tariff amendment order is set aside in so far as it changes the concept of SMP, non- predation and the related provisions,” TDSAT Bench stated and declared in an order addressed to the public.

Since Airtel and Vodafone had potentially challenged Trai’s rule on this pricing strategy, this announcement came as a ray of boon which made them heave a sigh of relief. A deadline of six months has been set for Trai to work on the pricing rule again and present it after the same. It was clearly mentioned in the order proclaimed by TDSAT that there weren’t any impression of secondary regulations in the impugned tariff amendment which can only block the powers of authoritative sections like the Competition Commission.

To clarify all questions about why the amendment (which encouraged discrimination) was dismissed, the order stated the following in simple words,

“Since we have found that there was lack of required transparency in arriving at the concept of SMP, non-predation and average variable cost, it is not necessary to discuss other issues raised by the appellants and noted earlier.”


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