This means an operator like Hutch could offer a particular set of tariffs to its subscribers when they call within the Hutch network and different tariffs on calls outside the Hutch network.

In the past, TRAI disallowed tariff plans, which provided lower differential airtime charge for calls terminating in one's own network.

In the 33rd amendment to the telecom tariff order notified on Wednesday, TRAI said the service providers can offer differential tariffs for off-net (different networks) and on-net (own network) calls.

But cases where such differential tariffs are anti-competitive or predatory aimed at lessening competition shall invite the regulatory attention.

TRAI has not allowed the operator with significant market power control (BSNL) to offer differential tariffs for leased lines (key inputs required by competitors in downstream markets) to its own customers or outside BSNL network.

Differential tariff structure assuming the nature of anti-competitive conduct is an issue of regulatory concern.

"Vertical price squeeze is one anti-competitive conduct that may be engaged by an operator with significant market power providing service in both upstream and downstream markets in any service area where the operator controls certain services that are key inputs for competitors in downstream markets and where those same key inputs are used by the operator to compete in the same downstream market", it said.

Giving an example, TRAI said that in the telecom market, vertical price squeeze can occur in the provision of dedicated local circuits.

The operator with significant market power can increase the price to competitors for the upstream input dedicated local circuit while leaving the downstream prices the same for its dedicated Internet access services. The effect would be to reduce or eliminate the profits or margins of competitors.

Such "squeeze" on the margins of competitors imposed by the pricing strategy of the operator with significant market power could materially affect competition, TRAI said.