Reliance Jio free data offer plan extension: Wrong call by Trai

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Updated: December 29, 2016 7:55 PM

In order to fully appreciate the issue let us refresh the background. Jio had announced its “Welcome Offer Plan”offering free voice and data services on September 1.

Reliance Jio, Free Data Plan, Trai, Airtel, Happy New Year OfferIn order to fully appreciate the issue let us refresh the background. Jio had announced its “Welcome Offer Plan”offering free voice and data services on September 1. (Source: IE)

Recently, newspapers were abuzz with the news “Trai asks Jio to explain free data plan”. The appearance of this news on December 27, while the letter was written by Trai on December 20, is perhaps a reaction to the filing of petition by Airtel against Trai in TDSAT.

In order to fully appreciate the issue let us refresh the background. Jio had announced its “Welcome Offer Plan”offering free voice and data services on September 1. This was considered predatory and anti-competitive by the existing operators, and they sent a joint representation to the regulator to look into the matter. Following which Trai had several rounds of meetings with the interested parties and came to the conclusion that this promotional offer announced by Jio will be restricted to December 3. Promotional offers as per the Trai directive can be allowed upto 90 days. Based on this clarification which perhaps had the assurance from Jio as well, the operators decided to let this offer pass. But well before the last date of the Welcome Offer, Jio, in a press event on December 1, announced that it had acquired more than 50 million customers in a record time and that it shall continue with the free voice and data services under its “Happy New Year Offer”.

“….I want to announce today… That starting December 4, 2016, Every new Jio user will get Jio’s Data, Voice, Video and the full bouquet of Jio applications and content, absolutely free, till March 31, 2017. We are calling this the “Jio Happy New Year Offer”. During this offer period, Jio and Jio customers, will be able to continue our journey of co-creating and building the best network experience together. All our 52 million plus Jio Welcome Offer users will continue to enjoy the unlimited benefits of Jio Welcome Offer till 31st December, 2016.”
This offer apparently and prima facie is a promotional offer, and therefore has to be compliant with the Trai directive. However, it appears that Jio not only violated the directive with this new offer but also violated with regard to the earlier welcome offer as well because:

The subscribers who were acquired under the “Welcome Offer” from September 5, were entitled to the benefit of that promotional plan only till December 3, where as per its own admission they have been extended the benefit till December 31. Similarly, the customers acquired on or after December 4, have been extended the benefit of promotional offer from December 4 till March 31, 2017.

So, whichever way you look at it, a violation was committed by Jio on December 4. But Trai is equally to blame, as instead of taking the matter into cognizance it has allowed its directive to be violated.

As far as the new offer is concerned, one may argue that it is new promotional offer. However, details of the new plan show that it is nothing but only a camouflaged version of the existing offer. And,this is clear from Jio’s announcement on December 1.

“We have noticed that 80% of Jio users consume less than 1 GB of data daily. One GB per day is still a substantial amount of data. In fact, it is 30 times the average usage on other networks!
But, the other 20% of users consume disproportionately higher amounts of data, and we have observed that this disproportionate usage contributes significantly to the congestion. In short, 20% of the users create a poor experience for the other 80%. So, in the Jio “Happy New Year Offer”, we have fine-tuned our Fair Usage Policy to ensure that all users get a fair share of Jio’s network capacity.”
The above announcement clearly shows that the new offer is nothing but a fine tuning of the fair usage policy. Moreover, this offer is extended en mass to the entire subscriber base without giving any option for an alternate tariff plan.

Just for the sake of argument even if it is a new promotional plan, did the Trai directive specify that one could continue to offer promotional offers. Time and again courts have upheld “what cannot be done directly cannot be done indirectly”. So, Trai should have either intervened and directed Jio to keep the plan in abeyance till fully examined or directed Jio to put a caveat in all its communication that the plan is under consideration and in the event it is found to be violative, the customer will be charged as per a plan approved by the authority.

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But by not exercising any of these options, Trai has allowed the customer to be exposed to a risk. Further, the speed with which the the entire matter is being handled is inexplainable. Having become aware of the violation onDecember 1, Trai sent a show cause notice to Jio only on December 20. As expected Jio has sought an extension of time to submit its reply which will allow them another couple of weeks. While submitting the reply, Jio will also seek personal hearing which TRAI will allow in the name of upholding the principles of natural justice.

After this personal hearing Jio will take another few weeks to submit written submissions of the proceedings. Subsequent to that Trai will take a few more weeks to arrive at a decision. By the time all this happens, it will already be April 1, 2017, and the “Happy New Year Offer” would have fully lived its life.

The author is founder and CEO, Tathya Consulting. Views are personal

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