TRAI launches public consultation over validity period for plans

14 May 2021

The Telecom Regulatory Authority of India (TRAI) has published a public consultation document on the validity period for tariff offers following consumer complaints regarding the 28-day validity period of many pre-paid plans. The document explains that the TRAI has received numerous consumer complaints regarding the use of 28 days for the validity period instead of a month, with users arguing that they are required to make 13 ‘monthly’ recharges per year instead of twelve, that it causes confusion, and that they feel cheated by the practice. Alongside the user complaints, the regulator adds that politicians have also expressed their concerns and the TRAI has received Parliament Questions from members of parliament regarding the issue.

Explaining the issue, the TRAI notes that whilst post-paid plans are charged on a monthly basis, pre-paid offerings are available with a range of validities, but the most popular offers are charged in terms of days, weeks or multiples thereof, such as 28, 57 or 84 days. The regulator stressed that service providers have been transparent in disclosing the validity periods of their plans and have not been found to have made any attempts to mislead consumers. During the regulator’s initial discussions with providers on the matter, the cellcos argued that charging on a monthly basis was not possible. Service providers highlighted the need for clarity regarding a plan’s duration and claimed that the variable number of days in a month prevented the development of ‘monthly’ plans. Similarly, it was claimed that because pre-paid services are valid from the recharge date for a set duration, the plans were not compatible with a fixed billing cycle. The cellcos also noted that increasing the standard offering to 30 days would not resolve the issue for customers, as they would still need to top-up at least 13 times a year.

Comparing the domestic market to international practices, however, the TRAI found examples of operators overseas that did offer monthly pre-paid plans that were automatically renewed on the same date each month. As such, the regulator has sought opinions on whether regulatory intervention is required to address the matter, and set out a number of potential solutions.