Are Reliance Jio free offers predatory? Trai asks attorney general for opinion

Reliance Jio was asked last month to explain why its free services offer under the promotional scheme should not be treated as predatory


Airtel and Idea Cellular have moved TDSAT against Reliance Jio free offers. Photo: Hindustan Times
Airtel and Idea Cellular have moved TDSAT against Reliance Jio free offers. Photo: Hindustan Times

New Delhi: The Telecom Regulatory Authority of India (Trai) will seek the opinion of the country’s top law officer to decide whether free services provided by Reliance Jio Infocomm Ltd are predatory in nature, a top official at the regulator said.

“The attorney general’s opinion is just an internal process of Trai and so, we have referred the matter to him for his opinion on questions raised by operators,” the official said, requesting anonymity.

Bharti Airtel Ltd, India’s largest mobile phone operator, had in December approached the Telecom Dispute and Settlement Appellate Tribunal (TDSAT), accusing the regulator of being a “mute spectator” and killing competition by allowing Jio’s free services. Jio, which initially offered free services till 31 December, later extended it to 31 March.

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Idea Cellular Ltd, too, moved TDSAT on Wednesday seeking to end the free service.

A TDSAT bench on 24 December had asked Trai to take a decision on matters raised by Bharti Airtel and respond in 10 days. Trai has sought more time to look into the matter. Earlier this month after Bharti Airtel’s appeal, TDSAT had asked Trai to take a stand on Reliance Jio’s promotional offers within “reasonable time”.

Idea’s plea will be heard on 1 February by TDSAT, along with Bharti Airtel Ltd, a person aware of the matter said.

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When questioned, Trai chairman R.S. Sharma said, “Everybody in this country is free to move court. The Constitution provided them this right. We are looking into the matter of Jio’s promotional services and the presentations / arguments made by other operators on Jio’s plans. We will decide on the issue very soon.”

On 1 December, Reliance Industries Ltd chairman Mukesh Ambani announced the extension of Jio’s free services till 31 March, riling incumbents who say the 90 days allowed for promotional offers would be over by 31 December.

Jio’s rivals contend that free services are resulting in asymmetric traffic, burdening their networks. On the other hand, Reliance Jio has been accusing rivals of not releasing adequate points of interconnection, leading to call drops and call failures.

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On Monday, Reliance Jio blamed Bharti Airtel for a call drop rate of 17.5% on its network against 0.5% allowed as per regulations. To be sure, the industry’s revenue has been hit due to the free services offered by Jio. Last week, Bharti Airtel chairman Sunil Bharti Mittal said it is difficult to compete with anything that is offered for free, and this is affecting revenues.

Analysts expect ARPUs (average revenue per user) to continue to decline in the fourth quarter of the current fiscal due to the Jio effect.

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