Finally a small victory over Reliance Jio for the incumbent operators. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has directed the telecom regulator TRAI to take action against Reliance Jio for not adhering to the 7-day limit of reporting the “Welcome Offer” which the telco introduced at the start of its commercial operations on September 5, 2016.
If you remember, the Welcome Offer from the telco offered free voice, data and SMS for three months. The order from TDSAT now could lead to a levy of a penalty of up to Rs 2 lakh on Reliance Jio by the regulator.
“We direct Trai to take appropriate action in accordance with provision in clause 7 of TTO 1999 (as amended) or non-compliance of the reporting requirement in respect of Welcome Offer,” said the tribunal in its order. “the start date of Welcome Offer as stated by Trai were September 1, 2016, but the documentation with the regulator showed the date to be on October 10, 2016. There is no escaping the fact that RJIL (Jio) did not meet the reporting requirement in respect of Welcome Offer“, the order further added.
As per rule, if a telco fails to comply with the seven-day reporting requirement, then it has to pay Rs 5,000 for every day of delay and up to a maximum of Rs 2 lakh. The same now get levied on Reliance Jio, who has during its commercial launch offered free voice, SMS and data for its subscribers for a period of 6 months till 2017 March-end.
However, TDSAT in its order said that Jio’s two successive initial plans which include the Welcome Offer and the Happy New Year Offer didn’t violate any rules around predatory pricing. According to a report by the Economic Times, the telecom tribunal has dismissed the pleas filed by Bharti Airtel, Vodafone India and Idea Cellular regarding the same.
The incumbent telco moved to the telecom tribunal after TRAI allowed Jio to continue with its free service offers beyond the stipulated 90-day period. But, the tribunal has essentially upheld the regulator’s earlier order.
Other important outcomes from the telecom tribunal order:
- TDSAT barred telecom operators, from offering ‘all services’ free, without the regulator’s prior written approval.
- Reliance Jio’s Welcome Offer and the Happy New Year Offer – didn’t violate any rules around predatory pricing and thus uphold TRAI’s earlier decision.
- TRAI needs to issue new guidelines for telcos to self-check the tariff plans such that they comply with principles of IUC.
- TRAI to issue guidelines to ensure that tariff plans are not predatory. “No benchmark or guideline has been provided by Trai as to when a below cost tariff by a significant market power would become predatory, warranting action“.
- Tribunal has asked TRAI to come up with quick collection and dissemination of relevant data related to the subscriber base, turnover, switching capacity and volume of traffic – 30% of activity in any of these factors held by a telco would allude to significant market power – subject to practicality.