03 February 2017 07:30:07 IST

RJio tariff plans not violating norms: TRAI

‘Welcome offer different from Happy New Year scheme; does not violate 90-day cap’

The Telecom Regulatory Authority of India (TRAI) has backed Reliance Jio’s free promotional tariff offer, saying that it was neither discriminatory nor predatory.

Top TRAI officials told BusinessLine that the tariff plans being offered by RJio were examined and found to be compliant with existing rules. Under these rules operators are allowed to offer a promotional scheme for not more than 90 days.

Incumbent operators, including Bharti Airtel, had filed a complaint that the move by Reliance Jio to extend the free offer beyond 90 days was anti-competitive and predatory.

RJio had launched its services in September, offering free voice and data services for three months under a welcome offer.

However, in December, the company launched another scheme called Happy New Year offer, allowing its existing as well as new users to continue to get voice and data services for free. It, however, limited the free data usage to 1 GB per day.

The incumbent operators said that both offers were identical and hence the 90-day cap had been violated.

TRAI officials said that the examination of RJio’s schemes showed that the welcome offer was different from the Happy New Year offer. “These are two different promotional offers. One ended in December and the other is ending in March. So, there is no violation,” the TRAI official said, on condition of anonymity, as the matter is being heard in the Telecom Disputes Settlement and Appellate Tribunal.

A-G’s all-clear

Earlier, the Attorney General of India had also communicated to TRAI that the tariff plans do not violate any existing regulation. RJio’s free offer is unsettling the incumbents. While Airtel’s third-quarter profits nearly halved, Vodafone and Idea Cellular are exploring a merger to stay afloat.

Allan C Nichols, CFA, Equity Analyst at Morningstar, said, “We think this merger also demonstrates the difficulty that RJio’s entrance has caused for the Indian wireless telecom market. RJio has been giving its voice service away for free, as well as some free data, which has attracted millions of subscribers. Many of its actions are questionably legal, but Reliance is extremely well connected politically, and so far, the government has been afraid to step in.”