The government has given a clean chit to Reliance Jio Infocomm, saying the Mukesh Ambani-owned mobile phone operator did not violate any rules by offering voice services free of charge.
“Since the guidelines/NIA for allocation or auction of spectrum do not prescribe the rates at which services are to be provided to customers, the question of violation of guidelines for spectrum allocation does not arise,” said Telecom Minister Manoj Sinha in Parliament on Wednesday.
Incumbent telcos had complained that by offering services below the minimum interconnect rates of 14 paise a minute, Jio was violating the Telecom Tarriff Order.
The ministry’s views align with those of the Telecom Regulatory Authority of India (Trai), which had found that the tariff plans filed with Trai “cannot be considered as IUC non-complaint, predatory and discriminatory.”
Early last month, incumbents Bharti Airtel, Vodafone India, Idea Cellular and Telenor India had complained to Trai, calling out Reliance Jio’s free voice and data packs and saying that they were below market prices, and therefore were ‘predatory in nature and contravenes the regulator’s Telecom Tariff Order (TTO) of 2004.
Telecom operators are required to pay 14 paise per minute for each outgoing call from their network to the operator on whose network the call finally lands, called the Interconnection Usage Charge (IUC). The incumbent telcos had argued that the new entrant’s plans were not IUC compliant.
However, the regulator had said Reliance Jio’s free voice offer did not violate any rules.
“The tariff plans offered by RJIL and various submissions thereafter have been examined and it is found that the tariff plans filed with Trai can’t be considered as IUC non-complaint, predatory and discriminatory at present,” Trai had said in its letter to operators last month.
The ministry on Wednesday added that present tariff regulatory regime was based on the principles of forbearance, which allows flexibility to market players to decide various tariff plans or products for different service areas of their operation.
“Tariffs can therefore be offered by service providers to counter the competitive tariffs of their competitors or any other prevailing market conditions,” the ministry said, adding that Trai keeps close watch on the telecom tariffs being offered in the market and intervenes, if required, to ensure that the regulatory guidelines are met.
Considering that the telecom segment was highly competitive between six incumbent operators, flexible tariff plans or counter plans has been allowed in the industry.
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