3 telecom firms under cartel scanner
In a possible setback to the three big GSM-technology based telecom operators — Bharti Airtel, Vodafone Essar and Idea Cellular, anti-monopoly watchdog MRTPC on Thursday issued a notice to probe allegations that they had formed a cartel to distort competition, the Press Trust of India said.
Admitting a report of MRTPC's investigative unit DGIR, a Bench of the quasi-judicial body, headed by Justice O P Dwivedi, issued “notice of enquiry” and started judicial inquiry against these operators to find out if they closed ranks to act in concert to simultaneously raise the prices of telecom services. The Monopolies and Restrictive Trade Practices Commission (MRTPC) Bench also directed the three companies to file their reply before it within four weeks.
In the investigation report, Director General of Investigations and Registrations (DGIR) has said that the three GSM operators, by colluding, have simultaneously increased the price.
The report stated that despite having different cost factors, structures and profits, they all fixed the tariff of their local call at Rs 1.20 a minute. Idea and Vodafone offered no immediate comment. Bharti Airtel said in a statement it was working towards affordability for consumers, and without countering any talk of cartelisation, said, “We remain fully committed to offering affordable products and services to our customers.”
The DGIR report further said that though the rental and tariff charges of calls and SMS messages fall under the forbearance category under the Telecommunications Tariff (23rd amendment) and GSM operators are free to fix any tariff for their services, “it cannot be mere coincidence that the tariff revision by them is of the identical scale.” “It is intriguing as to how all the respondents (operators) have revised their tariff rates in Delhi circle on the same date,” MRTPC said.
“It is also pertinent to mention that all the three respondents have announced the revision of tariff rates effective from August 10-13 in 2007 but all intimated the TRAI post revision on August 16 that year,” said the report, adding that this pointed towards a “preplanned and concerted action”.
The investigative arm of MRTPC also slammed the big three for not giving adequate notice to their customers before hiking tariffs as it has inherent effect of "unjustifiably imposing" increased cost on them.