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TRAI to telcos: Tariff packs cannot be priced differently on basis of user class

India’s telecom regulator TRAI has issued a directive banning all licensed telecom operator in India from offering differential (or discriminatory) tariffs to a set or class of subscribers. TRAI also ordered telcos to “invariably” file all new tariff packs to the regulator after being offered in the market. Telecommunication Tariff Order 1999, has forbidden this practice, but TRAI says that it went ahead with the directive after it received several complaints wherein telcos were found to offer discriminatory tariffs without filing it with the regulator. Currently, the tariff regime allows telcos to launch the packs first and then file it with TRAI for compliance.

Note that TRAI had looked at redefining the meaning of “discriminatory” in the context of tariff packs in its consultation paper on promo packs in February. TRAI said that some telcos were found offering free data to only new subscribers or at special rates (differing from normal packs). “However, since these special rates are not available to the existing subscribers, it can also be termed as discriminatory,” TRAI added.

Telcos including the top 3 operators Airtel, Idea and Vodafone have been selling differential tariff packs to its subscriber for some time now. Airtel has been increasingly offering user-personalized 4G packs with bundled voice, but the amount of data and other recharge benefits differ on the basis of:

i)Type of device owned: 3G or 4G smartphone users

ii) Type of User: High value or low-value user, or on the basis of less voice/data usage or more voice/data usage. Here is how: Under the ‘BEST FOR YOU’ option on My Airtel app, the below Rs 549 pack provides Unlimited local + STD calls with 42GB of data (1.5GB data a day).

But the same RC549 pack, listed on the Special Recharge sections says that for Rs 549, the user gets unlimited calling benefits but only 3 GB of bundled data.

Why is Airtel doing this and how? It’s simple. Airtel classifies high-value users by looking at their data usage and voice usage. Since I own a 4G smartphone, and make recharges of smaller denominations (500MB to 1GB), on a daily basis, Airtel’s systems identify me as a potential ‘high-value’ user and re-targets me with a customized recharge pack, as per my data and voice usage habits.

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

Airtel had justified this practice in a submission to TRAI’s consultation paper on tariff packs. 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.

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However, its rival, Jio had opposed this pricing structure, in the submission, while accusing that Airtel of discriminating subscribers on the basis of new and old users. “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 had submitted.

Download: TRAI Directive

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