New Delhi: Months after it came out with its free services that disrupted the Indian telecom market and sparked a bruising tariff war, Mukesh Ambani’s Reliance Jio Infocomm Ltd has accused market leader Bharti Airtel Ltd of offering misleading and discriminatory tariff plans.
In a letter addressed to the Telecom Regulatory Authority of India (Trai) dated 21 April, Jio said some of Airtel’s tariff plans and promotional offers such as the so-called “first recharge” ones that, for Rs293 and Rs449, offer free, unlimited local and STD calls and 1 GB data per day for 70 days “are being marketed in (a) misleading manner in gross violation of extant telecommunication laws”.
Jio requested the regulator to impose the highest penalty on Airtel as well as direct the company to immediately withdraw the offers.
“Airtel is providing the headline benefits only to a very specific group of new subscribers, i.e, the subscribers that opt to be Airtel’s subscriber with a 4G connection and also possess a 4G handset,” Jio said in the letter.
It added that all other “unwitting” new subscribers are not only provided with substantially lower data benefits of 50 MB in place of 70 GB, but the validity of recharge is also curtailed to 35 days from 70 days... and “post that they will be charged the exorbitant data tariff of Rs4,000/GB”.
An Airtel spokesperson said, “Bharti Airtel is in full compliance of all regulatory guidelines, including tariff orders. We categorically deny these allegations. Discounts are a standard lever in the arsenal of any business—be it e-commerce, telecom, insurance or aviation, etc.—and companies deploy these from time to time.
“These allegations are nothing but a continuation of Reliance Jio’s standard ploy of blaming others for all its problems, including network deficiencies. What’s even more ironic is that Jio itself offered free services for several months but is now pointing fingers at other operators, who are merely offering simple discounts to their own customers to retain them. In fact, it is Jio that has been blatantly disregarding all guidelines and directions of Trai.”
Jio did not respond to an email seeking response.
Jio’s counter-accusations come at a time when Trai has put out a discussion paper to address loopholes in rules dealing with predatory pricing and promotional offers.
When Reliance launched Jio in September, offering free data and voice calls, undercutting established rivals and eroding industry profitability, incumbent telcos responded by taking up the matter to the telecom tribunal, accusing the regulator of being a “mute spectator” and killing competition by allowing Jio’s free services.
Jio offered free voice calls and data until 31 December 2016 in a promotional offer, and later extended it to 31 March, and further to June-end.
It was forced to withdraw the last offer.
Jio’s entry also sparked consolidation, with Vodafone Group Plc’s India unit and Idea Cellular deciding to merge to create India’s largest telecom firm.
The annual revenue of Indian telecom firms declined for the first time since 2008-09 to Rs1.88 trillion in 2016-17 (from Rs1.93 trillion the previous year), and is likely to decline further to Rs1.84 trillion in 2017-18, CLSA said in a report released on 7 April.
Jio, in the 21 April letter to Trai, said Airtel is also violating another direction by the regulator that prohibits telcos from discriminating between subscribers of the same class and such classification of subscribers shall not be arbitrary.
“Airtel has chosen to create an arbitrary distinction on the basis of subscribers possessing 4G handset and 4G SIM. It has arbitrarily reduced the validity of voice benefits under the same recharge for the same class of subscribers without a 4G handset or 4G sim to half of that for those possessing both 4G handset and 4G sim,” it said.
Dharmesh Kant, head of retail research, Motilal Oswal Financial Services Ltd, said: “The good thing is that they want the law to intervene. So, eventually, this will lead to sanity coming back to market. Lower band of tariffs will get free. For the industry, it is a good thing.”