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TRAI to review tariff policy (Relevant for GS Mains Paper II)

Telecom regulator TRAI will review the rules of tariff assessment with regard to promotional offers and predatory pricing issues that have triggered a public spat between Reliance Jio and incumbent operators.

What are the issues that will be debated upon
1.    The issues to be debated include new measures that need to be prescribed by the regulator to ensure transparency in the tariff offers made by telecom operators.

2.    TRAI has sought views on which tariff offers should qualify as “promotional offers” and the need to limit the number of promotional offers that can be launched by an operator in a year one after another.

3.    It also seeks suggestions on definition and criteria for “dominance” in relevant telecom markets.

4.    It will also review the methods and processes that should be applied by the regulator to assess predatory pricing by a service provider in a relevant market.

Reason behind such review
The review comes amid a standoff between newcomer Reliance Jio and incumbent operators such as Bharti Airtel, Vodafone and Idea Cellular on issues such as predatory pricing, market dominance and extension of promotional offers. 

The tribunal is currently hearing a plea by Bharti Airtel and Idea Cellular challenging the regulator’s decision to allow Reliance Jio to continue free promotional offer beyond the stipulated 90 days.

What is Predatory Pricing ?
The pricing of goods or services at such a low level that other firms cannot compete and are forced to leave the market.

What is Market Dominance?
Market dominance is a measure of the strength of a brand, product, service, or firm, relative to competitive offerings. There is often a geographic element to the competitive landscape. In defining market dominance, one must see to what extent a product, brand, or firm controls a product category in a given geographic area.



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