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In an attempt to ramp up their Mobile Internet usage, Idea Cellular is now allowing its prepaid customers and retailers to gift other Idea customers who don’t have a data connection, 100 mb of free data. For this, the initiator is also given 100 mb of free data. In addition to this, Idea will periodically send these users tips on how to use the Internet (essentially promote websites). We’re not sure of why this is limited only to prepaid users, but that said, it does cover most of Idea’s subscription base.

This is a great move from Idea Cellular to allow people to get a sample of Internet Access, but lets be clear that this is just a promotional program and there is no business case for it. In Idea Cellular’s submission to TRAI on Net Neutrality at the beginning of the year, it had contested Free Basics, which made only the sites that were on Facebook’s platform free, by saying that:

“Such programs expect Telcos to bear the full cost of running the program, making telecom offer free data services. There is no business case for telcos to offer free data services for any platform or program. The same is apparent by the fact that most major telecom service providers in India have chosen to distance themselves from such programs.

Of course, what Idea is giving is open Internet, but the point about business case would also apply here. This is more about customer acquisition, not philanthropy. In particular, this move should allow retailers to push an Idea connection over that of competition. Note that the FAQs and terms and conditions are available only for Idea subscribers, so we haven’t been able to check the fine print.

Lets be clear about Idea’s intentions

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Idea Cellular’s real intentions around Differential Pricing are clear, and have been made clear in multiple submissions to the Indian government. What Idea Cellular said in its past regulatory submissions:

“…in the internet world, as we transition the customer from the physical to a digital way, pure price discount on mobile data or on applications/content will not deliver the desired results. Combo or bundled packs like watching first 10 minutes of a movie free, first 10 songs free, 2 days of mobile banking services at no data cost or Education sector and health services trial packs at discounted or subsidized data rates will have to developed and promoted to consumers as they try and discover these internet services.

“Internet adoption can only be driven by nonstandard offering – flexible, differential pricing approach to pricing of services. This activity cannot be driven by one single entity and can only be done when both telecom operators and application providers work together to create innovative product offerings and motivate the nonusers to use internet and applications.”

“To attract such a large investment, freedom / flexibility in pricing and continued forbearance policy are essential since any TRAI intervention/ control on differential pricing would have adverse impact on TSP business models leading to greater uncertainty of investment return.”

Even now, the Cellular Operators Association of India, of which Idea is a core member, is try to badger the TRAI into scrapping the Net Neutrality regulations, and threatening to go to court. The COAI in one of its letters to TRAI said:

…we earnestly request the Hon’ble Authority to review its decision over the CECN network and allow differential data tariffs on the basis of content irrespective of whether such content is provided through the closed network or open internet.

Our rebuttal of COAI here