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Predatory pricing win turns out to be double-edged sword for telecom operators | livemint

A lot can change in a year, especially in the hyper-competitive telecom industry, which has witnessed severe disruption and has seen operators publicly spar against each other and with the sector regulator, since Reliance Jio’s entry in September 2016.

In yet another cruel twist of fate, incumbent telcos Bharti Airtel and Vodafone Idea, which had managed to secure a favourable verdict from the telecom tribunal against the regulator’s predatory pricing order last year, will now find themselves in a sticky situation as the same law, which they fought against, would have now come to their aid.

A little over a year ago, the Telecom Regulatory Authority of India (Trai) announced rules under which it would examine tariffs of a significant market player (SMP)—which is an operator holding a share of at least 30% of either subscriber base or gross revenue in a telecom circle—to determine the existence of predatory pricing. It would also look at whether the tariff is below the firm’s average variable cost over a certain period. If the tariff was found predatory, the operator would face a penalty.

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Predatory pricing win turns out to be double-edged sword for telecom operators.

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