In August, India’s telecom regulator is all set for a change of guard. Never in its 23-year history has the Telecom Regulatory Authority of India (Trai) been accused of playing by the rules of a zero-sum game. A game that has soiled the shiniest story of liberalisation in the country.
Two of India’s three private telecom operators, which together account for account for Mint Reliance Jio commands 33.47% wireless market share, while Airtel has 28.31% and Vodafone Idea 27.57% Read more 56% of mobile subscribers, reported Rs 40,393 crore ($5.4 billion) in quarterly losses last week. In the five years to December, India’s wireless and wireline subscriber base grew by 12%, industry revenue grew by 2.4% and, importantly, the government’s earnings from this sector fell by 18.8%.
Not all the blame for this cratering can be laid at Trai’s door. Yet, there’s no escaping that the regulator failed at its vital duty under the Trai Act: ensuring the viability of the sector with a transparent, predictable, and equitable policy framework.
Needling of the two incumbents, Bharti Airtel and Vodafone Idea Limited (VIL), on their services had started in October 2015, and continues to date. Trai blocked the two telcos from providing premium services last month. However, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) struck down the move.
“Trai was fine with VIL launching [premium services] in November 2019, but when Airtel launched it, Reliance Jio filed filed The Economic Times Jio's complaint led to Trai blocking Airtel, Vodafone Idea premium plans Read more a complaint,” says a telecom industry veteran who doesn’t work for any telco.
The new entrant, Reliance Jio, has had a bull run since it launched its 4G pan-India services in September 2016. Trai allowed it to launch promotional plans with free voice calls for far too long—nine months. Its rivals complained, and even went to the Competition Commission of India calling out Jio’s predatory pricing, but no one budged. Meanwhile, Jio, which had its free voice and near-free data services “factored into the elasticity models” run by its consultants, knew exactly how long it needed its services to be free, and what regulatory gaps could be leveraged.
(Subsequently, Trai notified a new order new order Trai The Telecommunication Tariff (63rd Amendment) Order, 2018 Read more on predatory pricing in February 2018, which, in a nutshell, prevents any telco from doing what Jio did in the first year of its launch.)
The yin and yang of Trai’s regulatory powers, control and recommendation, have been telling under its current chairman, Ram Sewak Sharma.
