After eyeing dominance in marketplace, Reliance Jio pushing for greater role in COAI?

Last Updated: Sep 26, 2016, 16:20 PM IST
After eyeing dominance in marketplace, Reliance Jio pushing for greater role in COAI?

Zee Media Bureau

Reliance Jio and Cellular Operators` Association of India (COAI) are not new sparring partners. What's more, it would have been a naive thought to expect that the argumentative relationship between Reliance Jio and the core members would mellow down as Jio joins the telecom lobby group COAI.

However, instead of a semblance of peace appearing between the warring factions, the accusations and counter-accusations have turned further vitriolic.

And the story unfolds further the fight for hegemony-in the marketplace as well as within the lobby group.

Jio, on Sunday called COAI overwhelmingly biased and lopsided and accusingly wrote a letter to the COAI Chairman Gopal Vittal and Director General Rajan S. Mathews, saying that the entire decision making power and authority in the association rests only with the incumbent dominant operators. The rules of the group have been framed to subserve the vested interests of the three incumbent dominant operators -- Bharti Airtel, Vodafone and Idea. The other core members have been reduced to a nullity and their presence or not will always be inconsequential, attacked Jio.

It sought the complete overhaul of COAI's rules and regulations which should be made to meet the interests of all the members and not the dominating few. The company said that incumbent players command 68 percent of the total votes in the association, and that quorum in any executive council meeting is based on voting power, rather than number of members.

The letter Jio wrote to COAI's Vittal and Matthew, said that regulations of COAI abysmally fall foul of competition law, especially by extending absolute control on decisions to incumbent dominant operators. "In the light of the above, it is high time that COAI's regulations are amended to fall in line with (i) fundamental democratic principles namely, reasonableness, fairness, accountability and transparency, adequate representation to all members, etc., and (ii) to be compliant with all applicable laws, including principles of equity.

Jio criticised the voting norms of COAI and added that the norms are based on gross revenue of member companies, Jio said, "The IDOs (incumbent dominant operators) having a 60.84 percent market share based on revenues enjoy a dominant position in the market and command seven votes each, totaling to 21 votes. Apart from the IDOs, there are four more core members having a combined total of 10 votes shared amongst them. The IDOs command 68 percent of the total votes."

It said COAI voting norms were in breach of Societies Registration Act and also the competition law, Jio demanded that a committee be appointed consisting of three retired judges of the Supreme Court to ensure all regulations fall in line with "fundamental democratic principles of reasonableness, fairness, accountability and transparency".

In its rebuttal, the COAI sharply attacked Jio`s letter saying that the letter represents many misrepresentations, and misinterpretations of law, which will be suitably responded to after careful review and deliberation among members. It wondered why the company was raising the issues as something new.

COAI attacked Reliance Jio by calling it a backdoor entrant, and making inroads into the market on sly. "BDO, Reliance Jio was never an applicant for a UASL (Unified access service licence) or UL (Unified licence) but bought a BWA (broadband wireless access) through a front entity and then had it converted to a full blown UASL license despite strong objection from certain quarters including the CAG.", said COAI in a sharp reaction to Jio's letter. "Despite repeated and grave provocations from Reliance Jio, COAI wishes to state that Reliance Jio, which entered the sector as a back door operator, was welcomed by COAI as a full member," it said.

The industry group countered Jio's accusations and said, "Reliance Jio is labelling the established and well performing operators who have served the cause of digital India for long years as incumbent dominant operators. This is slanderous, mischievous and suggests that the existing leading members are a cohort bent upon blocking entry of new operators on the basis of bald allegations,".

None of the half a dozen new operators who have entered in the last five years have ever accused Cellular Operators` Association of India or in fact labeled the leading operators as incumbent dominant operators added COAI. Is the lobby group indicating that Jio has its own axe to grind in accusing COAI being unfair and undemocratic?