TDSAT order on Reliance Jio’s Welcome Offer may stop ‘race to bottom’: COAI

The tribunal asked the Telecom Regulatory Authority of India (TRAI) to work out guidelines that can be used for checking compliance of tariffs with principles of non- predation.

TDSAT order may stop race to bottom on telecom tariffs: COAI (Aniruddha Chowdhury/Mint)

Telecom tribunal TDSAT's order that directed the regulator TRAI to issue a framework for assessing tariff consistencies with non-predation principles may stop "race to the bottom" on telecom tariffs, according to industry body COAI.

"The TDSAT order may be helpful in stopping the race to the bottom when it comes to tariffs. Offerings will have to be filtered through the lens of whether they are predatory," Cellular Operators' Association of India (COAI) Director General Rajan Mathews told PTI.

On February 1, the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) upheld a TRAI order that had allowed Jio's free offers to continue beyond 90 days after its services were launched, but gave certain directions to the regulator.

The tribunal asked the Telecom Regulatory Authority of India (TRAI) to work out guidelines that can be used for checking compliance of tariffs with principles of non- predation.

Till such guidelines are issued by the TRAI, the TDSAT order insisted on a filing requirement and prior approval from the regulator, for operators launching "all services free" offers.

The TDSAT order said that till TRAI issues the non- predation filters, no "all services free" offer can be launched by either Reliance Jio or other telecom operator "without making a written submission to TRAI relating to self check for consistency with regulatory principles of non- predation".

"TRAI will examine such submissions within one week and convey its approval or disapproval in writing with reasons," the TDSAT order has said.

At present, the tariffs are under forbearance, which means operators virtually have a free hand in fixing the rates and only have to report plans to TRAI in seven working days of launch.

The TDSAT has said that it found the TRAI decision with regard to 'Jio Welcome Offer' and the 'Happy New Year offer' to be "in order requiring no interference". At the same time, it asked the TRAI to take "appropriate action" against Jio for non-compliance of the reporting requirement, with regard to the 'Welcome Offer'.

The two offers in reference are 'Jio Welcome Offer' and the 'Happy New Year offer'. Jio had launched the inaugural free voice and data plan in September 2016, and in December 2016, had extended the freebies up to March 2017.

Following this, the established players -- Airtel and Idea -- moved the tribunal against the TRAI order that allowed Jio to provide free services beyond the stipulated 90-day period.

The TDSAT order of last week, also directed the TRAI to issue clear guidelines, benchmarks or methodology for performing self check for consistency with principles of Interconnect Usage Charge (IUC) compliance.

"We direct TRAI to issue suitable direction/order/regulation regarding benchmark/guideline that can be applied for ascertaining consistency with the principles of non-predation," said the order.

TDSAT said its directions, need to be carried out expeditiously and "preferably within four months".

The TRAI is currently working on framing rules of tariff assessment with regard to promotional offers and predatory pricing.

A consultation paper on `Regulatory Principles of Tariff Assessment' pertains to measures that need to be prescribed to ensure transparency in the tariff offers of telecom operators, and strengthening definition relating to "non-discrimination". PTI MBI MR