CCI rejects Airtel’s predatory pricing complaint against Jio

Fairplay watch dog Competition Commission of India (CCI) has rejected Bharti Airtel’s allegations that Reliance Industries and its telecom venture Reliance Jio had engaged in predatory pricing, while launching mobile services through attractive and free offers.
After discussions with the companies and hearing arguments presented by lawyers of the two sides, CCI said a single-digit market share of Jio does not give it a position from where it can dominate the market and engage in anticompetitive tactics through abuse of its strength.
“In the absence of any dominant position being enjoyed by Jio in the relevant market, the question of examining the alleged abuse does not arise. Notwithstanding this, the offers of Jio do not appear to raise any competition concern at this stage,” the sixmember CCI bench, headed by chairperson D K Sikri, said.
Just last month, Bharti Airtel, the country’s top telecom operator, had reported a 72% decline in fourth quarter net profit as an intense tariff war took its toll, following the aggressive entry of Reliance Jio in the market.
Jio’s free voice and unlimited data offerings, which had continued till the end of March after being rolled out in September last year, had a catastrophic impact on the business and financials of Airtel as it witnessed a contraction in earnings from both voice and data segments.
Airtel’s net profit in January-March 2016-17 stood at Rs 373 crore against Rs 1,319 crore in same quarter of 2015-16. This was the second straight quarter of a steep decline in the company’s net profit after 55% fall in October-December quarter. Airtel continued to accuse Jio of engaging in “predatory pricing” and blame it for “deteriorating health” of the telecom industry.
“The sustained predatory pricing by the new operator has led to a decline in revenue growth for the second quarter in a row. The telecom industry as a whole also witnessed a revenue decline for the first time ever on a full-year basis,” Gopal Vittal, MD and CEO of Airtel’s India & South Asia operations, said.
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