RJio says COAI voting norms skewed in favour of 3 operators

Last Updated 25 September 2016, 11:10 IST

Reliance Jio today fired a fresh salvo at the cellular operators body COAI alleging that its rules including voting norms are "overwhelmingly biased and lopsided" and framed to serve vested interests of three incumbent operators - Bharti Airtel, Vodafone and Idea.

The Mukesh Ambani's telecom venture -– currently engaged in a bitter war of words with incumbent players over the interconnect issue -- has also sought an overhaul of COAI norms claiming that the "current voting mechanism does not accommodate the democratic principles of reasonableness, fairness, accountability and transparency".

Jio alleged that its voting rights in  are "skewed" in favour of dominant operators "giving them the absolute control to influence any or all of the decisions of the association".

The voting norms of the Cellular Operators Association of India (COAI) would abysmally fall foul of the Competition Law for perpetrating anti-competitive activities, it added.

"RJIL seeks a thorough overhaul and amendment of COAI regulations and COAI process by appointing a committee consisting of three retired Judges of the Supreme Court of India to make sure that both fall in line with fundamental democratic principles of reasonableness, fairness, accountability and transparency including with provisions for adequate measures to prevent any abuse in future," Jio said in a letter to COAI.

Reliance Jio - which recently launched its 4G services in the market and is itself a member of the cellular association – attacked the voting rules of COAI saying that the incumbent dominant operators or IDOs command 68 per cent of the total votes in COAI and control decision-making, while other core members have been "reduced to a nullity".

"The core member’s voting rights of the constituents in the Executive Council vary based on its Adjusted Gross Revenues, with maximum number of votes per core member capped at 7... The IDOs having a 60.84 per cent market share based on revenues enjoy a dominant position in the market and command 7 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 per cent of the total votes," Jio said.

Jio further said that although each core member nominates one representative to the Executive Council of COAI, the voting in the Executive Council too follows the voting rights pattern of the members resulting in "entire Executive Council being usurped by the IDOs".

"The IDOs have thus formed a cartel to perpetrate their vested interests using COAI, a supposedly independent fair platform, helping them to abuse their dominance in the market," Jio said in the letter, the copies of which are also marked to Telecom Minister, DoT secretary and TRAI chairman.

Jio claimed that COAI regulations are also in breach of the Societies Registration Act, 1860 which advocates 'one vote-one member' concept. Even the Supreme Court has repeatedly held that democratic norms require each member of society to have equal representation regardless of other consideration, Jio's added.

"There is no doubt that, COAI in the garb of an independent platform is being flagrantly misused by the IDOs to freely indulge in cartelization, abuse their dominant position, thwart competition, and act against public interest. The IDOs’ use of COAI Regulations, especially, the manner in which voting rights are skewed in favour of the IDOs giving them the absolute control to influence any or all of the decisions of COAI would abysmally fall foul of Competition Law for perpetrating anticompetitive activities,” Jio pointed out. 

(Published 25 September 2016, 11:10 IST)

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