Two recent moves by the Telecom Regulatory Authority of India (Trai) have created some discomfort for the industry. The first one relates to the audit of metering and billing of consumer services, where the regulator is examining whether a long-settled practice needs to be re-looked. Whether subscribers have been billed correctly is audited by every telecom operator, after which the same is examined by the regulator as part of an external audit process. It is natural that some anomalies will get flagged and operators concerned would be directed to take corrective measures. What is worrying the operators is a recent consultation paper by the regulator that seeks to conduct micro-audits at the circle (licensed service area) level, against the current centralised process. Licences are awarded on a circle basis and all other regulatory obligations, like market share, subscriber numbers, etc, are also computed on this basis.
In this context, it is fair for the Trai to feel that audit of billing and metering of telcos should also be done circle-wise. However, the telcos feel that they have centralised the process of audits and any change the regulator is mulling would be superfluous and add to their regulatory burden. The regulator is yet to come out with a final directive, but indications are that it may not fully agree with the contention of the operators. If it agrees, it is sure to demand the deployment of some new technological mechanisms, which may add to the telcos’ cost. The long-held grievance of the operators is that since tariffs in India are very low, they should not be burdened with additional regulatory costs.
The second issue relates to predatory pricing, which had arisen in 2017 post the launch of services by Reliance Jio and subsequently faded away. With the launch of 5G services by Jio and Bharti Airtel, rival Vodafone Idea, which is yet to start such services, has alleged that the two are indulging in predatory pricing—that they are providing 5G at 4G rates and offering unlimited data. While the regulator feels that the charge of predatory pricing is not correct as services are not being offered below cost, offering unlimited data is against regulatory principle. In the case of 4G services, data packages are designed such that if the monthly data quota is exhausted before the onset of fresh billing cycle, speeds are set at a lower level. Jio and Bharti have not set any monthly data limit in their 5G packages. This may not be technically right but practically does not mean much as 5G data consumption is still not that high.
What could have got fixed by a mere change in promotional language, has got muddied with the two operators citing past instances of Vodafone Idea indulging in predatory pricing and offering unlimited data in some of its 4G packages. As a result, Trai will now conduct a probe of all past offers by all the operators to determine when the first violation took place. It plans to pass a comprehensive order after this detailed examination is over. Rather than get into a regulatory overdrive over the issue of audit of billing and metering and unlimited offers, it would be better if the Trai instead calls a meeting of all the operators and resolve such issues across the table. Light touch regulation has become a hallmark of Trai; it should see that this is maintained.