Vodafone group CEO terms Trai predatory pricing rule as 'unfair'

Barcelona (Spain): British telecom major Vodafone today termed Indian telecom regulator Trai’s new rule on predatory pricing as “unfair” and said the company has to fight the competition “with hands tied at the back”.

He said that the company has lost 80 percent business in India due to data tariff war fuelled by a new competitor in the market. “Out of the blue, magically, a law or regulation comes. It sounds like you have to fight somebody with hands tied at the back. That’s (rule) not fair … we want fair competition. So, we are not in agreement with that specific regulation,” Colao said here.

He was responding to a query on predatory pricing norms issued by the Telecom Regulatory Authority of India (Trai). Under the new rules, Trai will impose financial disincentive of up to Rs 50 lakh per circle on operators if their service rates are found to be predatory in nature.

A tariff will be considered predatory if in a “relevant market”, a telecom operator with over 30 percent market share offers services at a price which is below the average “variable cost”, with a view to reduce competition or eliminate the competitors in the “relevant market”, as per an amendment made by Trai in the Telecommunication Tariff order.

When asked if he considers that the latest rule favours new players and if the company will challenge it, Colao responded affirmatively.