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Airtel, Idea want TRAI to make new regulations for promo packs after Jio issue

Reliance Jio has asked telecom regulator TRAI to come up with a website that will allow users to compare tariff packs, promotions, data offers, bundle offers, etc, offered by telcos in the country. It says that such a portal would make it easier for consumers to differentiate between tariff packs offered by several telcos. Jio was responding to TRAI’s paper which looked at redefining the definition of a promo offer by looking at various features that constitute a promotional offer, and how these offers can be ‘predatory’ and ‘discriminatory’, and ways to curb ‘anti-competitive’ pricing.

The consultation comes a time when telcos including Airtel, Idea and Vodafone are fighting Jio in court, alleging that its free data and voice offers are ‘predatory in nature’.

The Mukesh Ambani-led telco also pointed out that there is a lack of transparency and information disclosure regarding certain plans which affects how consumers choose their tariff packs. To tackle this, Jio recommended TRAI to develop “a web based price tool or price calculator which can perform calculations based on preferred consumption volumes, circle and rank subscription packages.”

Jio has also blamed its rival operators for creating confusion among users by offer tailored or customized tariff packs. It also added that these telcos are gaming the current tariff regulations system and taking “undue advantage of customers”. “These service providers offer special tariff plans to selective customers, many offers are made under the garb of usage and retention. There are special plans made for MNP (new) customers…the offers are never filed with the TRAI and made on one-to-one basis…in complete violation of regulatory framework,” Jio added.

“Classifying new users from existing users is not arbitrary”: Airtel 

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 TRAI had asked in the paper whether special offers being made to new subscribers should be considered as discriminatory, since current regulations state that a telco must not discriminate between subscribers or class of subscribers.  However, Airtel, in its submission pointed out that such a classification is not discriminatory since customized offers are basically “loyalty-based benefits” and that it is only meant for retaining users by offering then discounts on existing rates. “…such offers to individual customers should not be viewed as being discriminatory in any manner. A uniform discount offered to all customers would, in effect, be seen as a tariff plan, not a discount,” Airtel added.

Airtel and Idea want new regulations for promo packs

Airtel has also criticised Jio for its promo offers in its submission stating that the “free tariff offered by a new entrant for more than 6 months generated a tsunami of incoming voice traffic on our network.” It added that the incoming traffic from Jio was asymmetrical, leading to a “complete failure of the IUC regime”. IUC or Interconnect Usage Charge is paid by the telco on whose network a call originates, to the other, on whose network the call terminates.

Apart from this Airtel and Idea has suggested TRAI a set of changes, which, according to them would help stop ‘predatory pricing’ and anticompetitive practices by ‘significant market powers’:

  • Distinguish promo offers from generic packs: Airtel said that “promotional offers can be distinguished from special tariff vouchers, combo vouchers and regular tariff plans on the basis of…duration of offers and benefits to customers.” In this way,  it will become easier for regulatory bodies to keep a check on violations since Airtel is basically asking for a legal differentiating of a promo from generic ones.
  • Differentiate markets on the basis of technology and download speed: Airtel also asked TRAI to “define the market on the basis of services such as Voice, SMS, Data, Internet Access, Carrier and Enterprise.” It also wanted the regulator to distinguish technologies and speed: “4G is distinct from 2G and, hence, the two are not comparable. The data market could further be classified in terms of speed, instead of technology,” Airtel added. Idea has also asked for a similar differentiation.

Factors to be used for determination of Significant Market Power”: Idea said in its submission that TRAI’s current definition of significant market holder—“a service provider holding a share of at least 30% of the total activity in a licensed service area”–needs to be revisited. It suggested following addition to the present IUC regime:

-The (tariff) offers should not be made available/ launched which are below cost of most of the operators in the relevant market.

-The telecom operator should not cross subsidize from other business (apart from the telecom business) to enhance its subscriber case.

-Dominance in one sector should not be used to leverage predatory pricing in another sector thereby foreclosing such a market.

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