Apex court to weigh-in on TDSAT/TRAI feud, alongside ongoing Aircel and RCOM cases

4 Jan 2019

In a busy start to the year for India’s Supreme Court, the apex body has received petitions from Aircel and Ericsson relating to ongoing feuds over unpaid dues, whilst the Telecom Regulatory Authority of India (TRAI) has brought a fresh appeal to the court, related to its rulings on predatory pricing and market dominance.

The Economic Times writes that the regulator is looking to overturn a December 2018 decision by the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) that rejected its order setting new definitions and guidelines on significant market power (SMP) and predatory pricing. The TRAI’s rules had defined an SMP player as having 30% market share of revenue or subscribers and applying pricing regulations only to operators with that status – excluding other factors such as call volume or capacity. The TDSAT ordered the TRAI to reconsider the provisions within the next six months, describing the measures as ‘extreme’ and ‘an unnecessary abdication of its regulatory powers’. The body’s chief concern related to the rules providing artificial protection for disruptive telcos, which could destabilise the sector through predatory pricing long before achieving the 30% threshold for regulation.

Aircel, meanwhile, has filed a contempt petition against Bharti Airtel and the Department of Telecommunications (DoT), as the two entities had not complied with November 2018 court order to return bank guarantees to the bankrupt cellco. Aircel is due a combined total of INR4.53 billion (USD64.6 million) related to the sale of its 4G spectrum to Airtel in 2016.

Finally, Swedish vendor Ericsson is pushing for punitive measures against Reliance Communications (RCOM) chairman Anil Ambani after the telco missed several deadlines to pay dues totalling INR5.5 billion. Mr Ambani had given personal assurances that the amount would be cleared by 30 September 2018 – later pushed back to 15 December that year, though this deadline was also missed – but the company relied on the completion of a previously-agreed spectrum sale to Reliance Jio Infocomm (Jio) to generate the funds to pay the amount owed to Ericsson. The spectrum sale has been bogged down in a separate legal battle with the DoT, however. As such, the vendor has asked that Mr Ambani’s travel be restricted and that he face imprisonment if found guilty of contempt of court. Further, Ericsson urged the apex court to ‘allow insolvency resolution proceedings … against the respondents’. For its part, RCOM has submitted its own contempt proceedings against the DoT, blaming the ministry for needlessly delaying the spectrum sale by asking to Jio to take responsibility for past dues for the spectrum, which it alleges goes against current rules on spectrum trading.