AN ANALYSIS OF THE REGULATORY WAR BETWEEN THE COMPETITION COMMISSION AND TELECOM REGULATORY AUTHORITY OF INDIA 

This article was written by Srinath Sambangi, a student of  ICFAI Law School, Hyderabad.

INTRODUCTION:

It is safe to say that India is a diverse country since there are many aspects present in the real world that support the above statement. Starting from culture to cuisines, dialects to dimensions everything in India is so different from each other. The same can be said about its economy. Indian economy is regarded as one of the most unique economies in the world. It is a kind of economy that includes a mixed economy in which the private players are allowed in some Public Sector Undertakings, Foreign Investments are permitted in certain sectors and it envisaged state protection to the companies that could vanish. These are all a consequence of the liberal policies enacted by the Indian Government in 1991. In the first three decades of post independence in India, The governments have followed a path to economic development through licensing and controlling and the competition was generally muted because of the provisions given in the Monopolies and Trade Restrictive Practices Act, 1969. The MRTP Act, however became redundant after the liberalization era. This competition between the market players was foreseen and there had to be a regulatory authority and a central act which had to curb monopolization and had to promote fair competition.

The Indian Parliament had paved roads for a central act which promotes a healthy economy. The Indian Competition Act, 2002 was passed and it stood out to be a ground breaking legislation and it provided for The Competition Commission of India. The Competition Commission of India is a  regulatory body created to maintain a healthy competition in the Indian Economy.

Law is dynamic and the world changes from day to day. Many unforeseen events affect the economy and creates an impact on how it works. Heraclitus, the Greek Philosopher has correctly quoted that  “Change is the only thing that is constant”. On September 5^th, 2016, The Telecom Industry has braced itself for a huge change in how the business is done. JIO, launched and owned by Reliance Industries came up with an idea that has revolutionized the Telecom Sector in India. It offered free Calling, Data and messages for a free of cost which can be availed by getting a JIO SIM issued by it’s service providers at free of cost. This called for a huge change in how things go and the main competitors who have enjoyed major market share till now have been left with a daunting task.

MAJOR PLAYERS IN INDIAN TELECOM SECTOR:

India is regarded as the second largest telecom industry in the world with a subscriber base of over a 1.19 Billion people. Before we discuss about the impact of activities of a few players in the Indian market, we must discuss about the players that are relevant and bring change in this particular sector. India has primarily been a nation that used wired landlines sets to communicate. The wireless cellular revolution took its own sweet time to catch up in India. The first phone call on a wireless device was in the year of 1995 which is much later when compared to India’s counterparts in the western world. Modi Telestra was the first ever mobile operator in India which was a partnership between the Indian Modi Group and Australian Communication firm called Telestra. This can be said as one of the major breakthrough as far as foreign collaborations are concerned after the Liberal Economic Reforms in 1991. Following 1995, there have been many entries, many failures in the Telecom Industry. The major players in Indian Telecom Sector are as follows:

1. Bharathi Airtel
2. Vodafone
3. Idea Cellular
4. Reliance Jio

It has to be said with certainty that Bharathi Airtel is a market leader with 24.25%[1] followed closely  by Vodafone, Idea Cellular and Reliance Jio.

Rivalry between Airtel and Reliance Jio:

Bharathi Airtel was one of the most successful private players to enter into the wireless telecommunications market. It was established in the year 1995 and its owned by Bharathi Enterprises. It was one of the first telecommunication brand to introduce prepaid and postpaid plans. It was highly successful in attracting customers as it offered flexible plans on calling, data and SMS. Its one of the major players in the market that introduced the Indian customers to 3G and 4G network bands. With 24.25% of Market Share in India and its presence in Africa its only going to grow bigger and do better. However, this growth was slowed down in the year 2016 when Reliance Jio was relaunched in a different avatar. It offered its customers free data, phone calls and messages as its introductory offer. To purchase a SIM card, an interested customer must just furnish a valid Aadhar Card. It was one of the first of its kind in India and it went on offered various offers to its customers after the expiration of the introductory offer.

In this Competitive environment, its common to see disparities between firms and companies. Airtel, which was in verge of eliminating competition faced a huge slow down due to Jio. Owing to many reasons that were a direct result of Jio’s entrance into the market, Airtel has filed a complaint against Jio for predatory pricing.

Before going into the turf wars between CCI and Trai we must thoroughly define and analyse the role of TRAI.

Telecom Regulatory Authority of India (TRAI) is a regulatory body established under the section 3 of the Telecom Regulatory Authority of India Act of 1997. This was created as there was a belief that the Telecom Regulatory was overseen by the Indian Government and it needed an Administrative body for itself. TRAI’s main mission is to create conditions which will facilitate the growth in telecommunication industry in India and have its say over different subjects such as tariffs, interconnections and quality of services.

TRAI VS COMPETITION COMMISSION OF INDIA- TUSSLE BETWEEN TWO MAJOR ADMINISTRATIVE BODIES IN INDIA:

The turf war between TRAI and the CCI has begun due to the ongoing tussle between Airtel and Reliance Jio. The trigger for this war was the letter dated 21^st July, 2017 sent by the Chairman of CCI Mr. Devendra Sikki to the Chairman of TRAI, Mr. R.S Sharma which reminded TRAI that the Telecom Regulator’s move over formulating a framework over predatory pricing rests upon the definitions and laws given in the Competition Act. And the act of TRAI may blur the lines between the two bodies and will create confusion according to him. To rebut this argument, TRAI has claimed that the competition being ex poste cannot regulate the pure intra-sectoral issues such as determination of tariffs and TRAI was in a better poised to decide matters within its own scope.

CONCLUSION- WHO HAS THE JURISDICTION OVER COMPETITION IN TELECOM SECTOR:

All said and done this is not the first time two administrative bodies and a tussle over the control and jurisdiction of a matter in similarity. A conclusion can be made by having a comparative analysis of the same situations in different countries. In the USA, specific sector laws also include provisions relating to competition and the Federal Trade Commission doesn’t intervene in its sector specific laws. In countries such as Brazil and The United Kingdom, certain proposals have to be made and be sent to the Competition Commission for approvals unlike in India where the matters are independently adjudicated. The Spanish follow a mode where there was a super agencies formed for this friction between the sector specific bodies and competition regulators. Mandatory consultation of the two bodies of friction is a written law in India but does not practically work. Hence, in my opinion, TRAI must solely function itself in technical issues such as tariff determination and quality control and leave the determination of Competition, Predatory pricing issues to the Competition Commission which is solely created for that reason without deviating itself into irrelevant matters. The nature of the current issue of turf war can be avoided by establishment of a common appellate authority which hears both the opinions and comes to a finality by resolving the difference in opinions.

[1]     https://telecom.economictimes.indiatimes.com/news/airtel-leads-telecom-market-with-24-21-share-jio-sees-highest-growth-in-wireless-subs-trai-oct-data/62038886