Telecom Regulatory Authority of India (Trai) is likely to direct Reliance Jio and Bharti Airtel to stop offering unlimited data in their 5G tariff plans. The regulator’s move follows its examination of a recent complaint of predatory pricing against the two operators by Vodafone Idea.
Vodafone Idea had said the two have significant market power (30% market share across circles) and their 5G tariffs are predatory as they offered below cost services.
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While Vodafone Idea has not rolled out 5G services yet, Jio and Airtel are offering them at the same rate as 4G services.
Sources said Trai, after examining the matter, is of the view that the tariffs cannot be termed predatory as they are not below cost. Further, offering 5G at 4G rates cannot be termed predatory. However, offering unlimited data as part of any plan is against the fair usage policy principle of tariff regulations, therefore the two should stop it.
A direction to this effect would mean that Jio and Airtel can continue with their data plans at 4G rates, but would have to reset the speed to lower limits if the data is consumed before the of new billing cycle begins. The principle of fair usage policy (FUP) applies to 4G plans and should apply to 5G tariffs as well, Trai has concluded, sources said.
On 4G plans, telecom service providers reduce the data speeds to 64 Kbps if subscribers exhaust their data limit before a fresh billing cycle starts. Operators are required to publish the same with the tariff plans on their websites and send alerts to subscribers when data usage reaches 50%, 90%, and 100%.
Within seven months of launching 5G services, Jio and Airtel collectively has over 50 million subscribers with an average data usage of around 8-9 GB. Both the operators have collectively rolled out services in over 5,600 cities and towns. Currently, 5G penetration is low and asking the telcos to introduce a data cap will not make sense at this point in time as majority of the users are on 4G, experts said.
However, Trai sources said that under the tariff regulations, offering unlimited data is prohibited, hence operators should follow the regulations.
According to Nokia, the current data consumption of 19.5 GB per user per month could more than double to almost 43 GBs by 2027 and a large portion of this will be because of 5G.
Recently, standalone DTH operator Tata Play also wrote to Trai alleging predatory pricing by Jio and Airtel with regard to their broadband plans offering live TV channels. However, this issue will not be covered by Trai’s direction on unlimited offers to Jio and Airtel.
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The main issue here is the convergence between telecom and broadcasting services, which is not directly addressed by existing regulations. While tariff regulations are there for telecom services, and broadcasting services, what happens if broadcasting services are offered by telecom players through their OTT apps or data connectivity plans, is not directly addressed by existing regulations. Trai feels that since OTT apps come into play here, it cannot intervene as it has no regulatory powers over OTTs.