Lok Sabha Question No. 1647 (UNSTARRED), answered on 2017-07-26
Subject: Anti-competitive Practices by Telecom Service Providers
Ministry: COMMUNICATIONS
Asked by: KOTHA PRABHAKAR REDDY, M. UDHAYAKUMAR

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA UNSTARRED QUESTION NO.1647 TO BE ANSWERED ON 26 TH  JULY, 2017

## ANTI-COMPETITIVE PRACTICES BY TELECOM SERVICE PROVIDERS

## 1647. SHRI PRABHAKAR REDDY KOTHA:

ADV. M. UDHAYAKUMAR:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether the Government has taken note of the reported consolidation among the Indian Telecom Service Providers (TSPs) and if so, the details thereof and the reaction of the Government thereto
- (b) whether the reported consolidation is likely to yield enough competition without causing fragmentation of spectrum and if so, the details thereof;
- (c) whether the Government has taken note of the alleged anti-competitive practices including  cartelisation  being  resorted  to  by  some  of  the  Indian  TSPs  against  new entrants  into  the  telecom market and if  so, the details  thereof  and  the  reaction  of  the Government thereto; and
- (d) the action taken/being taken by the Government in this regard?

## ANSWER

## THE MINISTER OF STATE (IC) OF THE MINISTRY OF COMMUNICATIONS & MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI MANOJ SINHA)

- (a) Yes, Madam. Department has been receiving request for merger and acquisition since opening of the sector in 1999. Further, a phase of consolidation is also going on at present. The various recently received proposals and their status are as follows:
- (i) Acquisition  of  telecom  business  of  M/s  Sistema  Shyam  Tele  Services Limited  (M/s  SSTL)  by  M/s  Reliance  Communications  Limited  (M/s RCOM).  Department  conveyed  to  merging  entities  about  the  details  of required  additional  Bank  Guarantees  (BGs)  as  per  direction  of  Hon'ble TDSAT in its order dated 17.05.17 passed in Telecom Petition 26 of 2017 for taking on record the said merger. But both companies are yet to submit the additional Bank Guarantees.
- (ii) Merger of  M/s  Augere Wireless  Broadband Services  India  Pvt.  Ltd.  with M/s Bharti Airtel Limited. The Department conveyed to take on record the provisional merger subject to outcome of Telecom petition 6 of 2017.
- (iii) Demerger of telecom business by M/s Reliance Telecom Limited (RTL) & merger into M/s Reliance Communication Limited in five License Service Areas. The Department conveyed to take on record the merger subject to the fulfillment of the conditions prescribed in letter dated 17.04.17 but both companies are yet to fulfill the conditions.

- (iv) Merger  of  M/s  Telenor  (India)  Communications  Limited  with  M/s  Bharti Airtel  Limited.  They  have  intimated  in  March,  2017  about  it.  Department conveyed  the  objection(s)/representation  on  the  proposed  scheme  on 05.07.17 and same is also brought to the notice of National Company Law Tribunal (NCLT). Approval by NCLT is awaited.
- (v) Merger  of  M/s  Vodafone  India  Limited  &  its  subsidiaries  with  M/s  Idea Cellular  Limited.  The  merger  has  been  announced  by  press  release  on 20 th March, 2017 and M/s Idea and M/s Vodafone has intimated about it. However,  the  scheme  of  merger  and  approval  by  NCLT  has  not  been submitted.
- (vi) Demerger of Wireless Telecom Business of M/s Reliance Communication Limited & M/s Reliance Telecom Limited (RTL) and its consolidation with M/s  Aircel  Limited  &  Dishnet  Wireless  Limited  was  intimated  to  the Department on 27.03.2017. Department conveyed the objection(s)/representation  on  the  proposed  scheme  on  19.04.17  and same  is  also  brought  to  the  notice  of  National  Company  Law  Tribunal (NCLT). Approval by NCLT is awaited.

(b) The  consolidation  among  the  said  Indian  Telecom  Service  Providers  (TSPs) does not cause fragmentation of spectrum rather it allows consolidation of spectrum to provide better services by efficient utilization of spectrum. After the reported consolidation among the various Indian TSPs, there will be enough competition in the sector  as  six  players  are  expected  to  remain  in  each  service  area  in  access  service segment.

(c) & (d) While  raising  the  issue  of  delay/  denial  in  provisioning/  augmentation  of Point of Interconnections (PoIs), allegations have been made by the new entrant (M/s Reliance  Jio  Infocomm  Limited)  against  the  existing  incumbent  operators  (M/s  Bharti Airtel  Limited,  M/s  Idea  Cellular  Limited  and  M/s  Vodafone  India  Limited)in  respect  of anti-competitive practices including cartelization.

As  per  the  provisions  of  section  11  (1)  (b)  (ii),  (iii),  (vi)  and  (vii)  of  Telecom Regulatory Authority of India (TRAI) Act, 1997, the matter of interconnection between two telecom networks is under the purview of TRAI.

TRAI  has  examined  the  issue  raised  by  the  new  entrant  and  submitted  its recommendation dated 21.10.2016 to the Government. The said recommendations were examined by the Department of Telecommunications (DoT) and referred back to TRAI for reconsideration vide letter dated 05.04.2017. The reconsidered opinion of TRAI has been received. The DoT is seized of the matter.

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