TRAI in a fix over claims of 5G predatory pricing

TRAI in a fix over claims of 5G predatory pricing
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Vodafone Idea’s complaint against rival telcos Reliance Jio and Bharti Airtel over 5G predatory pricing has put the Telecom Regulatory Authority of India (TRAI) in a tight spot.

There are currently no rules against offering unlimited plans in India. The regulator never considered restricting usage as it could be an anti-consumer move.

But third-ranked Vodafone Idea has asked TRAI to push Airtel and Jio to stop offering unlimited 5G data bundled with specific plans. The telco claims that such a move will accelerate subscriber churn, furthering losses.

TRAI treads carefully

TRAI feels that any order to stop offering unlimited plans may need to be preceded by a consultation process to avoid being challenged in court, as per the Economic Times, citing government officials,

The regulator is considering directing Jio and Airtel to stop their unlimited 5G data offerings or restrict them for some time, among other options. It is also exploring the possibility of requiring telcos to fix a data limit.

“The telcos have seen an average usage of around 8 GB on 5G. They can any time fix the limit to 400-500 GB. However, it is unlikely to be utilised fully by customers as 5G is still not the dominant technology,” an official was quoted as saying by the publication.

The report said that TRAI would act if it feels that the market dynamics are hurting due to such plans.

Airtel and Jio have denied any wrongdoing in the matter, and said that they couldn’t be forced to stop the offers since 5G currently has a small user base, with network rollouts currently in progress. Both telcos, however, told the publication that they would abide by any direction coming from the telco.

Predatory pricing: a history

This is not the first time a telco has complained about predatory pricing.

The issue entered the limelight in 2012 when some consumers complained that telcos were throttling internet speeds after a specific amount of data had been utilized. To protect consumers’ interests, TRAI directed all telcos to specify any fair usage policy (FUP) to the customers.

The issue gained prominence again in 2016 when Jio launched its network and offered voice and data for free for months, leading other telcos to accuse Jio of predatory pricing. The antitrust body of the country later rejected the allegations.

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