TRAI asks Jio to withdraw 3-month offer

Action follows tussle between existing operators and the regulator

NEW DELHI, 07/11/2016: Last week it was reported that Reliance Jio will end its Welcome Offer on December 3 after a TRAI directive. And that is still happening. But there is also a chance that Reliance may figure out some way to extend the free offer, if that is what the situation demands. According to a new report, Reliance Jio has informed analysts that it may extend free data and voice calls services till March 2017. "Mass scale free welcome offer could continue until March 2017 to attract subscriber growth towards the celebrated 100 million mark with RJio's indicative data pricing at Rs 130 - 140 per GB. Photo: V.V. Krishnan

Reliance Jio on Thursday decided to withdraw its ‘Jio Summer Surprise’ offer after the Telecom Regulatory Authority of India (TRAI) advised the Mukesh Ambani-led firm to withdraw the three-month ‘complimentary’ offer.

On March 31, Reliance Jio, which was expected to charge for its services from April 1, 2017, extended the deadline for buying Jio’s ₹303 plan until April 15, 2017. Subscribers who bought the ₹99 Prime membership till April 15, 2017, with a plan of ₹303 or higher, were eligible for the ‘Jio Summer Surprise’ offer and its subscribers were entitled to get free services for three months, starting April 15.

“Jio is in the process of fully complying with the regulator's advice, and will be withdrawing the three months’ complimentary benefits of Jio Summer Surprise as soon as operationally feasible, over the next few days,” according to a company statement. Customers who have subscribed to the offer prior to its discontinuation will remain eligible for the offer.

Jaideep Ghosh, partner telecom at KPMG said: “While the regulators’ rationale to urge Jio is understandable, I believe that the telecom tariff must be left to market forces.”

Jio, through its free offers since September 5, 2016, has notched up more than 100 million subscribers, of which 72 million were willing to pay for Jio services as of March 31, as they become ‘Prime’ customers.

After the extension, existing players such as Bharti Airtel and Idea Cellular moved the telecom tribunal against TRAI for letting Jio continue the free promotional offer beyond the stipulated 90 days.

The operators criticised the regulator for being a “mute spectator” to the alleged violations. On January 31, TRAI had held that Jio’s free voice calling and data plan were not in violation of the regulatory guidelines.

Consolidation frenzy

The arrival of Reliance Jio was followed by a consolidation in the industry, even as it spurred a fall in profits for incumbent operators. In March, Idea Cellular merged with the Indian unit of Vodafone Plc, making the entity India’s largest mobile telephony and data service provider.

Earlier, in February, Bharti Airtel bought the assets of Telenor ASA’s India unit while in September last year Anil Ambani-led Reliance Communications decided to merge with Aircel.

Bharti Airtel’s December quarter profits fell to ₹422 crore from ₹1,709 crore in December 2015. Idea Cellular reported a loss of ₹492 crore in the December quarter compared with a profit of ₹693 crore in the same period of the previous year.

Similarly, Reliance Communications posted a loss of more than ₹1,600 crore in the first three quarters and is likely to end FY17 with a net loss.

The Cellular Operators Association of India had said the current tariff war in the market may not be “sustainable for long.”