Row over Reliance Jio free offers pushes Trai to review tariff orders

Trai in a consultation paper says need to deal with issues like transparency, free offers and non-predatory pricing that have come to fore after Reliance Jio launch


Airtel has moved TDSAT raising questions about the validity of the extension of Reliance Jio free offers until March 2017 and accusing Trai of inaction against the new telecom firm. Photo: Pradeep Gaur/Mint
Airtel has moved TDSAT raising questions about the validity of the extension of Reliance Jio free offers until March 2017 and accusing Trai of inaction against the new telecom firm. Photo: Pradeep Gaur/Mint

New Delhi: The Telecom Regulatory Authority of India (Trai) said on Friday that it will review tariff orders with a view to developing a new framework for the telecom sector.

In a consultation paper issued on Friday, the telecom regulator cited the need to deal with issues such as transparency, promotional offers, disclosures and non-discrimination, adherence to the principle of non-predatory pricing, and assessment of dominant position.

All these issues have gained prominence in the wake of the launch of services by Mukesh Ambani-promoted Reliance Jio Infocomm Ltd, which has taken the market by storm with its promotional offers and free voice calls. Since its launch, the telecom industry has lost about 20% of its revenue due to Jio’s free services, India Ratings and Research has said, revising its sectoral outlook for 2017-18 to “negative”.

Market leader Bharti Airtel Ltd has moved the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), raising questions about the validity of the extension of Reliance Jio free offers till March 2017 and accusing Trai of inaction against Jio.

In turn, Mumbai-based Jio has urged Trai to “impose the highest penalty on Airtel”, accusing the market leader of “misrepresenting the benefits” of its free unlimited calls and free data plans.

Trai said in the paper that its move to review tariff orders was necessitated by the shift in the Indian telecom market from voice to data. The trend towards convergence has also resulted in parallel, but related, shifts in pricing strategies— in particular, the growing prevalence of bundled tariffs.

Through its paper, Trai has also sought to clear the air over “non-discrimination”, which essentially means telcos should not discriminate between subscribers of the same class.

“There are certain other terms like ‘transparency’ and ‘non-predation’ which require further elaboration in the context of retail tariff,” Trai said.

The sector regulator also wants to define the meaning of ‘promotional offer’—another point of contention in the industry, especially after the launch of Jio services.

“The prevalent guidelines on promotional offers are limited to only the eligibility condition and the opening and closing dates of such offers. They are, however, silent on issues like: number of promotional offers that can run concurrently or that can be offered in a calendar year; repetition of offers; benefits that can be offered, etc.,” Trai said in the paper.

It also said that there is a need to undertake a comprehensive review of the potential anti-competitive practices that could harm the sector and its consumers. Trai wants to explore appropriate regulatory tools to address such concerns.

“The anti-competitive behaviour in the context of tariff setting can be through predatory pricing by the dominant market player,” Trai said.

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