Bharti, Vodafone, Idea get MRTP notice for cartelisation
Bharti Airtel, Vodafone Essar and Idea Cellular, the three big telecom operators on 3rd April, 2008 has been issued `notice of enquiry` against them for allegedly forming a cartel to distort competition by the anti-monopoly watchdog MRTPC. Admitting a report of MRTPC`s investigative unit DGIR, a Bench of the quasi-judicial body, headed by Justice O P Dwivedi, issued `notice of enquiry` and started judicial inquiry against these operators for cartelising and increasing prices of telecom services simultaneously. The Monopolies and Restrictive Trade Practices Commission Bench also directed the three companies to file their reply before it within four weeks.
In the investigation report, director general of investigations and registrations has said that the three GSM operators, have simultaneously increased the price. The report stated that despite having different cost factors, structures and profits, they all fixed the tariff of their local call at Rs 1.20 a minute. The report further said that though the rental and tariff charges of calls and SMS fall under the forbearance category under the Telecommunications Tariff (23rd amendment) and GSM operators are free to fix any tariff for their services.
Airtel, Vodafone and Idea had in August 2007 raised tariffs for STD, local calls, SMS and value-added services. While Vodafone raised STD call charges to Rs 2.65 from Rs 2.40 for pre-paid users, Bharti increased STD tariffs for pre-paid and post-paid customers in Delhi region to Rs 2.65 and Rs 2.40 a minute respectively from Rs 2 earlier. On August 13, 2007, the three companies increased local charges within their own network to Rs 1.20 per minute for prepaid customers from Rs 1 a minute. These three companies control around 65 per cent of the GSM-based mobile services market and raised local call charges by 20 per cent and STD charges by 20-32 per cent.
Moreover, they also refrained from publicising the tariff hike and brought out customary notices by way of small advertisements tucked inside newspaper pages. MRTPC was suspecting formation of cartelisation in the sector and the three big telecom firms were distorting competition in the market. The commission has listed the matter for July 31 for next hearing.
Tags: Airtel, idea, MRTP, tariff hike, vodafone