CCI probes Airtel, Voda, Idea for blocking Reliance Jio

The Competition Commission has ordered a detailed probe against major telecom players for allegedly trying to block the entry of newcomer Reliance Jio, according to sources.

business Updated: May 12, 2017 10:56 IST
CCI,Reliance Jio,Airtel
A Reliance employee demonstrates Jio LYF phone at their headquarters on the outskirts of Mumbai.(REUTERS)

The Competition Commission has ordered a detailed probe against major telecom players for allegedly trying to block the entry of newcomer Reliance Jio, according to sources.

The fair trade regulator’s decision comes on a complaint filed against leading incumbent players -- Bharti Airtel, Vodafone and Idea Cellular -- and industry body COAI (Cellular Operators Association of India).

A senior official said the regulator has decided to investigate allegations of unfair business practices made against the incumbent telecom players.

Sources said the regulator would also examine the overall conduct of the COAI, especially since the allegations of anti- competitive practices have been made against three of its key members.

The probe by the Director General (DG) has been ordered for allegedly trying to restrict the entry of Reliance Jio, the official added.

DG is the investigation arm of the Competition Commission of India (CCI). Cases where the watchdog finds prima-facie evidence of competition norms’ violations are referred to the DG for detailed probe.

When contacted for comments on the CCI ordering the probe, an Airtel spokesperson said, “We have not received any such communication from the CCI and would, therefore, not be able to comment.”

“We have already stated that we have always responded with alacrity and provided a staggering quantum of PoIs (Point of Interconnections) to Reliance Jio in record time,” the spokesperson added.

Emails sent to Vodafone, Idea Cellular and Reliance Jio did not elicit any response.

“Though we have not seen the order as it has not been published yet, we are disappointed at the apparent news (if confirmed), that the CCI has decided to go forward with an investigation into the complaint filed by Reliance Jio,” COAI Director General Rajan Mathews said.

“We believe the COAI and its members will be fully vindicated in the matter and truth will prevail,” he said.

Last year, billionaire Mukesh Ambani’s venture Reliance Jio stormed into the Indian telecom market - the second largest market globally with 1.2 billion subscribers - with disruptive offerings and has since been at loggerheads with the incumbent operators.

Reliance Jio had accused incumbent players of not providing sufficient network connectivity (leading to call failures on its network) while the latter countered the claims saying the newcomer was unleashing “tsunami” of free traffic from its mobile network.

The two sides have also clashed on other contentious issues like free voice and data offers, and customised retention plans.

Sources said the watchdog has concluded that dominant telecom players allegedly colluded and used the platform of COAI to deny point of interconnection to Reliance Jio.

The COAI’s role would be looked at in the context of Section 3 of the Competition Act that pertains to anti- competitive agreements.

It is pertinent to mention here that Reliance Jio, last year, had filed two complaints of anti-competitive practices against the COAI as well as Bharti Airtel, Vodafone and Idea Cellular.

According to the official cited earlier, a decision with respect to complaints filed by the incumbents against Reliance Jio is yet to be taken. It was alleged that the new entrant was indulging in predatory pricing ways.

So far, the regulator is believed to be of the view that only an established or dominant player can resort to predatory pricing.

First Published: May 12, 2017 10:55 IST