Reliance Jio got a boost on Thursday after telecom regulator TRAI said that the Jio tariff plans comply with its regulations and the current regime of tariff orders. This comes after Bharti Airtel and Idea Cellular moved telecom tribunal TDSAT against TRAI for allowing Reliance Jio to extend its promotional free services Welcome Offer, which expired on December 31 2016, to March 31 2017 in the form of the new Happy New Year Offer.
TRAI is expected to communicate the statement of Reliance Jio plans complying with existing regulations to Airtel and Idea. The two had contended that Jio's free services should not be allowed to extend after the 90 day period. Jio's free calls, data and other services have led to a tariff war in the telecom sector, and rivals Vodafone and Idea are in talks for a merger.
"TRAI has examined the tariffs and has found that the [Reliance Jio] tariffs are in compliance with regulations and existing tariff orders," sources said.
The decision comes just days after the Attorney General communicated to TRAI that Reliance Jio tariff plans do not violate any existing regulation or order issued by the regulator, and therefore it should not intervene in the matter.
TRAI had asked for the Attorney General for views on Jio's free voice and data offering till March 2017, that rivals have termed "predatory."
Sources said during the hearing at TDSAT on Wednesday, TRAI counsel submitted that the regulator has already taken a decision on the issue, after which TDSAT directed TRAI to file its decision. The next date of hearing on the matter is February 6.
On December 20, 2016, TRAI had asked Reliance Jio to clarify as to "why the offer of free data under the promotional offer should not be treated as predatory" and also explain why its tariffs were not in violation of existing regulatory guidelines.
In its response, Jio had stated that its latest Happy New Year offer is substantially different from the Jio Welcome Offer - which commenced on September 5 - as in the initial offer, it had provided 4GB of free data per day, while in the new one, the same was capped at 1GB under Fair Usage Policy.
Also, Reliance Jio contended that in the first, there was no option of renewal or payment after the 4GB limit was exhausted, but in the fresh offering, one can recharge both data and the promised speed.
In terms of market dominance, Reliance Jio said it accounts for 6 percent market share in the country whereas the Competition Commission of India (CCI) norms specify 30 percent threshold to trigger the misuse of market dominance clause.
"The two tariff plans are not the same, in terms of data on offer and other aspects," TRAI sources said.