Reliance Jio vs. Airtel (and the rest)

[Sushubh]

Source

 

[Sushubh]

Mommy, Ambani Broke My Balance Sheet - Bloomberg Gadfly

 

[Sushubh]

Did Mukul Rohatgi Give a Regulatory Carte Blanche to Reliance Jio?

It is rare for a regulator empowered by parliament to seek the opinion of the attorney general (AG) on rules and regulations. In an unprecedented action, the Telecom Regulatory Authority of India (TRAI) approached the AG when the incumbent operators opposed the regulator’s proposal to allow Reliance Jio to offer promotional tariff beyond 90 days, bypassing its own rule that was being followed for 15 years.

Former TRAI chairman Rahul Khullar, known for his integrity and fairness as a regulator, told the The Wire that tariff setting was entirely in the regulator’s domain and TRAI was the final authority in the matter. It is, thus, unprecedented that the regulator should seek the AG’s opinion on a tariff setting matter.

Reliance’s initial promotional offer was allowed by TRAI till December 31, 2016. But this continued without any formal word from the regulator, which finally wrote to the AG, Mukul Rohatgi, on January 17, 2017, seeking his opinion on the matter. With the clock ticking, Rohatgi responded within 10 days. His legal opinion not only overturned the practice of limited free promotional service but also other established principles adopted thus far.

The AG’s letter dated January 27, 2017, which is in The Wire‘s possession, goes beyond the issue of the 90-day period of promotional offers and says that even the basic regulatory principles of tariff do not apply on the promotional offers. It means that an operator can offer any tariff scheme as a promotional offer, and it can be discriminatory, predatory and non-inter-connect charges (IUC) compliant.

“I am of the opinion that the promotional offers, even in respect of a dominant player cannot be subject to principles of non discrimination, non predation and IUC compliance,” the AG says in his letter. Such carte blanche in regard to regulatory principles is unprecedented, to say the least.

The AG, the government’s highest legal officer, also says that an operator can offer promotional tariff for an indefinite period and there is no restriction on the number of promotional offers.

 

[Sushubh]

Airtel pips Reliance Jio in active subscriber additions in April

 

[Sushubh]

Airtel accuses Jio of predatory pricing; big 3 telcos meet IMG

 

[vishalrao]

So we have rules about "predatory pricing" that enables cartelisation and price-fixing in an official capacity, and prevents others like Jio from disrupting the market.

 

[Sushubh]

To be honest, Jio has been given a lot of leverage. Right from the very beginning when a shell company was used to buy spectrum. On one hand the government kept on crying about losses during spectrum sale (2G Scam?) and on the other hand, they allowed Jio buy up spectrum using shell company name to keep the prices low. And then kept on changing rules or allowing them to get away with a lot of things. And the story from The Wire that indicates that Rohatgi was involved as a consultant in their judgement on Jio does not help the cause. In the end, no one can deny that Ambani has a lot of friends in the government and they are allowed to get away with a lot.

Sadly, TRAI does not even seem to be enforcing their own rulings. Airtel and others continue to offer hidden plans to specific customers even though they have announced that they are illegal. Without these retention plans, Airtel and Vodafone would actually feel the hurt of Jio's pricing that is available to anyone and everyone as they would not be able to retain their loyal customer base which is now being lured to stay with customized plans and pricing.

 

[vishalrao]

I guess Jio is the lesser evil then IMHO.

 

[Sushubh]

the actual face of jio would be out when they are a significant player in the market. as the primary connection for a large number of users. ambani has already indicated that data is the next oil. and how they are going to make money from all the data collected from hundreds of millions of telecom and internet users in india is something that remains to be seen. government has already made it easy for private companies to get access to personal and biometric data of practically everyone in this country. would be rather easy to create data profiles linked to each individual. we haven't seen anything yet. people are worried about privacy scare from companies like google and facebook. jio operates in a country where the government openly states that people have no right over their own body and privacy is a western concept not applicable to this country.

 

[vishalrao]

yeah... seeing all the unfolding developments in privacy (aadhar etc) makes you realise the frightening prospects to look forward to in this country in the coming months and years.