Airtel’s Mittal vows to challenge Trai pricing order in court

Sunil Mittal, chairman of the country's largest telecom operator Bharti Airtel, said on Wednesday that the company has no choice but to challenge the Telecom Regulatory Authority of India's latest regulation on predatory pricing in a court of law.

Sunil Mittal

Speaking to media on the sidelines of the Mobile World Congress in Barcelona, Spain, Mittal said that they have a right to conduct business in a proper manner which the new regulation hinders, so they are left with no option.

''I don't think there is any other choice. We heard views of one of the leading operators on the predatory pricing order, Vodafone. Vittorio (Colao) has made a very strong comment and we have heard TRAI's response. This order hinders operators' ability to conduct business in an orderly manner and I cannot envisage anything other than a legal challenge,'' Mittal said.

On Tuesday, TRAI chairman R S Sharma had said that any company or entity that thought the orders on predatory pricing were not fair was free to go to court.

''We have no reservations or objections if someone wants to challenge TRAI's order in court. After all, that is the right place and the right forum to do so,'' R S Sharma said at the MWC in Barcelona.

Earlier, both the Cellular Operators' Association of India (COAI) and Vodafone India had threatened to go to court over the orders, which they feel favour new entrant Reliance Jio Infocom.

The latest tussle between Jio and the older 'incumbents' is TRAI's recently amended tariff order that says predatory pricing will in future be determined on the basis of average variable cost and whether there is specific intention on the part of a carrier to reduce or kill competition.

It has also modified the definition of significant market power (SMP) -which a telco should have for any of its plans to be deemed predatory - to an operator with more than a 30-per cent share by either subscriber base or gross revenue. Earlier, the SMP parameters included volume of traffic, including data, and switching capacity, which have been dropped in the amended regulation.

Both Vodafone and COAI have suggested they may challenge the order in court. While Jio is a member of COAI, it is seen as mostly representing the older 'incumbents' Bharti Airtel, Vodafone and Idea Cellular (See: Predatory pricing: incumbents free to approach courts, says TRAI).

''We believe we must have the right to conduct business in a proper manner. What we are saying is that we will agitate at the proper forum. We must be provided the right to conduct business in an orderly manner, which is enshrined in the Constitution,'' Mittal said.

Prior to Mittal, Vodafone's group CEO Vittorio Colao had criticised the Trai's order and said that the company will challenge it in court.

With Mittal's statement, it seems clear that the incumbent operators will individually challenge the order while the COAI will also challenge it as an industry association.

On other issues pertaining to the telecom sector, Mittal said that the next spectrum auction will not happen in a hurry, and the government should see that the pricing is right.

''My view is it will depend on bands. We now have sufficient spectrum and going into 5G, we will need larger slices of spectrum. So we will be going with high bands or would like to have a sub-GHz band to start with and then add the capacity bands. I don't think this will happen in a hurry because the government will also have to see which bands are to be auctioned,'' he said.

Mittal, who is also the chairman of global industry body GSMA, said that the new national telecom policy (NTP) should look at rationalising levies like spectrum usage charge and licence fee as well as taxes like the goods and services tax, as the industry is heavily taxed.