Barely hours after India’s two big mobile service providers – Reliance Jio and Airtel – began a price war over their prepaid plans, the country’s telecom regulator cried foul and ordered the operators to refrain from offering differential tariff to customers as a lure to port them over.
In its order, the Telecom Regulatory Authority of India (TRAI) described such offers as a lure to “induce churn from the competitors’ network” and said it was acting on few complaints from telecom services providers against each other. The companies had approach the regulator claiming that the mobile number portability offers were only induced by third-party channel partners without consent of the service providers.
Under the law, mobile phone subscribers can shift from one service provider to the other without having to let go of their number. However, in the past it was observed that once a subscriber raised a number portability request, that service provider’s channel partners would bombard the user with offers.
TRAI’s latest order, available on their website, reiterates that telecom operators must not introduce offers that haven’t been previously reported to the regulator. So the order is actually meant to enforce an earlier order that sought to create a level playing field amongst the service providers. India has witnessed a three-pronged battle for mobile subscriptions between Jio, Airtel and Vodafone-IDEA.
The order further said that it expects service providers to enhance transparency with a view of removing unfair trade practices and ensure non-discrimination in tariff orders. Only tariffs reported to TRAI should be offered through telecom operators’ channel partners, distributors, retailers, third-party apps, and others, it says while putting the onus of compliance on the service providers.
Earlier this week, Reliance Jio offered with a new range of prepaid plans that came bundled with unrestricted access to all content on Disney+ Hotstar, starting from Rs 499. Jio’s new plans, in addition to offering 1 year subscription of Disney+ Hotstar, has unlimited voice, data, SMS, Jio Apps and other benefits.
Right on cue, Airtel announced its own counter, offering a one-year subscription to Disney+ Hotstar for the same Rs.499 with 3GB of daily data, unlimited voice calls and 100 SMS messages per day for 28 days.
It remains to be seen whether the current order from the regulator creates a major impact on the customer acquisition strategies adopted by the major players. In the past, a similar order from TRAI had fallen flat as the service providers delegated the offer-making activities to the channel partners.
By fixing responsibility of this behind-the-scenes activity squarely on the service providers, TRAI is now expecting better compliance.
“The offering of differential tariff to the subscriber porting from the network of other service provider is not valid and reasonable classification as the motive behind such classification is apparently to induce churn from the competitors network and which is discriminatory and contravenes the provisions of clause 10 of TTO, 1999,” it says in the latest order.