The Indian telecommunications sector has undergone significant transformation over the past decade, driven by pivotal legislation aimed at fostering fair competition and protecting consumer interests. A recent study published in the ‘Revista de Direito, Estado e Telecomunicações’ sheds light on the efficacy of the Telecom Regulatory Authority of India (TRAI) Act of 1997 and the Competition Act of 2002 in achieving these objectives.
Lead author Soumadip Kundu, an Assistant Professor of Law at JIS University in Kolkata, emphasizes the importance of these legislative frameworks in shaping the competitive landscape of the telecom industry. “The legal structures intended to safeguard competition have been tested rigorously in the past ten years, revealing both merits and shortcomings,” Kundu notes. His research critically evaluates the effectiveness of these laws, particularly in light of unresolved disputes that have emerged between the TRAI and the Competition Commission of India.
One of the key findings of the study highlights a significant gap in the regulatory framework, particularly concerning the concept of “collective dominance.” The absence of this concept in the Competition Act has left a void that the government has yet to address. Kundu points out that an amendment to include “collective dominance” was proposed but ultimately failed to materialize due to political circumstances. “The lack of clarity surrounding collective dominance has resulted in numerous disputes that hinder fair competition,” he explains.
The research also scrutinizes the impact of Reliance JIO Infocomm Limited’s entry into the market, particularly its controversial “zero pricing” strategy, which has raised questions about market distortion and predatory practices. While the Competition Act addresses predatory pricing, it remains silent on “penetrative pricing,” a tactic that allows new entrants to gain market share but can destabilize established competitors. Kundu argues that regulatory bodies must establish clear benchmarks for promotional pricing to ensure a level playing field.
The implications of this research extend beyond telecommunications, touching upon the broader commercial landscape, including the energy sector. As industries increasingly rely on telecommunications for operational efficiency, any disruption in fair competition can have cascading effects. Kundu’s findings suggest that a robust regulatory framework is essential not just for telecom but for the health of interconnected sectors like energy, where reliable communication is vital for managing resources and infrastructure.
As the Indian government contemplates reforms to its institutional framework for competition, Kundu’s research serves as a timely reminder of the need for clarity and adaptability in regulation. The study calls for a re-evaluation of existing laws to ensure they meet the challenges of a rapidly evolving market landscape.
The insights presented in this article underscore the necessity for ongoing dialogue between regulators, industry stakeholders, and legal experts to navigate the complexities of competition law in India. The findings are not only relevant for policymakers but also for businesses operating within the telecommunications and energy sectors, as they seek to understand the implications of these regulations on their strategic decisions.
For further details on Kundu’s work, you can visit JIS University.
