ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Challenges of Competition and Regulation in the Telecom Sector

The telecommunications sector has come a long way from its perceived status as a natural monopoly to a competitive multiplayer industry. As competitive forces, both from within the telecom industry and the surrounding digital ecosystem, continue to redefine the sector’s dynamics, it creates new challenges for regulation and competition enforcement. Calling for fresh thinking on the respective roles of the sectoral regulator, the competition authority and the need for greater synergies between them, a model for voluntary cooperation between the authorities is suggested.

The author wishes to thank Vinod Kotwal, Ajay Shah, Vishal Trehan and an anonymous peer reviewer for helpful comments on earlier drafts of this paper.

The telecommunications sector is often seen as the poster child of India’s economic liberalisation. Its transition from a government monopoly to a multiplayer industry was accompanied by the introduction of regulatory interventions, rooted, to a large extent, in the concerns of competition policy. The aim of regulation was to specify ex ante measures to check against practices that could adversely affect the rights of consumers, block the entry of new firms, or make it difficult for others to compete effectively. Over the last 25 years, regulation and competition have worked well to make India the second largest telecom market in the world.

However, the story so far has been almost entirely in reference to wireless networks, as about 98% of India’s 1.19 billion telecom subscribers and 95% of the 446 million internet subscribers are on wireless networks (TRAI 2018a). Several issues of competition policy lie at the heart of many of the current debates in this segment, including tariff wars, interconnection terms and effects of the ongoing consolidations in the sector. Given that it constitutes such a significant portion of the market, trends and turbulence in the wireless segment are critical to the health of the industry as a whole. Understanding the challenges of regulation and competition in this field, therefore, requires a closer look at the respective roles of the sector regulator and the competition authority as well as the interface between them.

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Updated On : 21st Sep, 2018
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