In response to the consultation paper on ‘Licensing Framework and Regulatory Mechanism for Submarine Cable Landing in India’ floated by the Telecom Regulatory Authority of India (TRAI), Vodafone Idea Limited (Vi) rebutted rivals Reliance Jio and Bharti Airtel’s suggestion that there should be a financial threshold for entities wanting to set up a cable landing station (CLS) in India. Vi believes that such a condition would restrict it to companies with deep pockets and may even lead to a monopoly.
Additionally, the operator noted that giving hold to deep pocketed players on cable landing stations and international capacities would lead to vertical price squeeze as they may be able to influence pricing and availability of such capacities to other Indian operators, which in turn could stifle the competition by pushing out relatively less financially strong ILDOs.
Meanwhile, Jio and Airtel had suggested that there needs to be a criterion for allowing a licensed ILDO/internet service provider (ISP) who wants to set up a CLS and terminate any submarine international cable in India over its CLS. As per Airtel, the criteria should include minimum net worth and holding a minimum equity percentage (i.e. 10 per cent stake or investment), either directly or indirectly in the proposed submarine cable/consortium, adding that such a qualifying criteria should be applicable prospectively for future cables as the existing consortium agreements have long been closed. While Jio had not asked for the applicant ILDO to have an investment in the submarine cable system, it did reiterate that the regulator should set some net worth and experience criteria for eligibility since the applicant would be responsible for establishment and maintenance of systems and cable within the territorial jurisdiction of India.
Vi, however, has argued that conditions of net worth and investment in the cable system will mean huge cost for the ILDOs and even some of the existing ILDOs having CLS would not be able to meet and eventually must shut down their CLS operations, effectively killing competition. It also pointed out that these criteria will reduce choice for consortiums who are investing in laying of submarine cable systems.