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Commission questions TRAI inaction

23 Feb 2017

India’s Telecom Commission, the Department of Telecommunications’ (DoT’s) highest decision-making body is reportedly planning to chastise the Telecom Regulatory Authority of India (TRAI) for ‘jeopardising’ the health of the telecom sector by failing to enforce its own rules on promotional tariffs. The Economic Times writes that it has seen a letter to the TRAI that criticised the watchdog’s inaction regarding the impact of aggressive newcomer Reliance Jio Infocomm (Jio). The new entrant’s back-to-back promotions providing customers with free unlimited voice and data services have sparked a price war in the market, driving down prices and revenues, thereby limiting the amount collected by the government through taxes and fees. According to the note, Jio’s launch has already cost the government INR6.85 billion (USD102.19 million), with the commission adding that sector revenues are expected to fall by a further 8% to 10%. Further, a senior official with knowledge of the matter was quoted as saying: ‘The commission has expressed its deep concerns for the health of the sector and asked the TRAI to implement its decision[s] of June 2002 and September 2008 regarding promotional tariffs.’ The decisions in question refer to rules that prevent a provider from offering a promotion for more than 90 days, which Jio ostensibly violated with its initial ‘Welcome Offer’, which was available from 5 September to 31 December 2016.

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