The Department of Telecommunications has sought an explanation from telecom majors Jio and Airtel on discontinuing the entry-level 1GB mobile data plans, as per a Mint report.
According to the report, the DoT move comes on account of affordability concerns after the two biggest telecom operators discontinued their cheapest data plans and hiked tariffs.
Furthermore, the Department of Telecommunications has directed the Telecom Regulatory Authority of India (TRAI) to look into the matter and submit a report.
Jio and Airtel’s reply
As per the Mint report, the telecom operators said that they have discontinued the 1 GB data plan after analysing the market and user preferences. In a response to TRAI, Jio said that it removed the plans after analysing the market conditions, and some of its discontinued plans are still available in the offline stores, the report adds.
Similarly, Airtel discontinued the Rs 249 plan after analysing the market to increase the value for the customers.
What can TRAI do?
TRAI is the primary regulator of the telecom industry in India. While the telecom companies have the liberty to design their recharge plans and tariff rates based on the demand and market conditions, TRAI has the power to intervene in the interest of the consumer.
What plans were discontinued?
Reliance Jio and Airtel together control about 75 per cent of the telecom market in India. They discontinued their entry-level and cheapest 1 GB per day mobile data plans in August.
In the discontinued recharge plan, Jio used to offer 28 days of validity for Rs 249, and Airtel offered 24 days of validity for the same amount.
A JM financial report stated that the telecom companies removed the 1 GB data plan to increase their average revenue per customer.
The report explained that about 20 -25 per cent of the customers of Jio and Airtel were 1 GB data plan subscribers before the plan was done away with. The removal of the plans could have increased the monthly average revenue per user for Jio and Airtel by Rs 11-13 and Rs 10-11, respectively.