Trai set to release new rules on pricing in wake of Reliance Jio dispute
New Delhi: The Telecom Regulatory Authority of India (Trai) is set to introduce within the next two weeks rules that will define whether a particular tariff announced by an operator is transparent, non-predatory and non-discriminatory or not, chairman R.S. Sharma said in an interview.
“Transparency, non-discrimination and non-predatory, these are three broad principles which have to be adhered to... what will be the hallmarks or attributes of such tariffs, that is what these principles will decide,” Sharma said.
The proposed regulations are expected to bring an end to the controversy started after the entry of Reliance Jio when the company announced a “welcome offer” giving free data and voice for three months starting 5 September 2016. Jio on 1 December 2016 announced the extension of these free services till 31 March 2017 under its “Happy New Year” offer.
Incumbent operators had then contended that existing regulations stated that any promotional offer by a telecom operator must be limited to 90 days. Idea Cellular and Bharti Airtel had, over a year ago, also moved the Telecom Disputes and Settlement Appellate Tribunal against Trai and Jio over the extension of free services by the latter.
“In this case, the arguments are complete. The last hearing was on 22 December and the case is reserved for judgement,” a lawyer representing a top telecom operator said requesting anonymity.
During that time, Jio had written to the regulator contesting the view of its rivals and had said that its free data offer was not predatory as the company was not a significant market player in the cellular mobile services category.
Moreover, Jio had also told Trai that the second offer can in no way be construed as an extension of the first offer as current regulations consider two plans as distinct even if there is only a small difference in the terms and conditions. The welcome offer was a fully free offer, whereas the Happy New Year Offer had limited free entitlement with the option of paying to avail of unrestricted services, it had said. Bharti Airtel in a post-earnings call on 25 January had said it faced a “tsunami” of incoming calls on its network due to the “predatory pricing” of a new operator.
Trai had ruled that Jio’s plans were not violative of current norms, but faced with backlash from operators, the regulator had issued a consultation paper on “Regulatory Principles of Tariff Assessment” in February, through which it had sought views on the matter, including which tariff offers should qualify as promotional offers and what should be the features of a promotional offer.
Trai had also sought views on whether there was a need to restrict the number of promotional offers that can be launched by a telecom service provider in a calendar year one after another and/or concurrently. It had also sought views on what could be a “relevant market” and how to define dominance in these relevant markets.
“We have been delayed in some sense. We were looking at the international experience also and what are the principles there,” Sharma said.
The regulator is also set to meet broadcasters on 12 January and telecom operators on 23 January to come up with a broad agenda for 2018. “We will also review what was decided last year, how much has been completed,” Sharma said. The regulator will hear the issues faced by players in both sectors during the two meetings.