Trai's wrong call

The telecom regulator must avoid taking arbitrary decisions

By granting an interim relief to Vodafone Idea in the premium tariff plan case, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has taken a judicious and timely call. The company had moved the TDSAT after the Telecom Regulatory Authority of India (Trai) blocked its premium tariff plan, RedX, citing discrimination against low-paying customers. While a similar plan offered by Bharti Airtel was blocked, the telco hasn’t taken any legal action. As the appellate tribunal has said in its stay order, the Trai directive to suspend the premium plan lacks prima facie reasons. It’s also right in pointing out that the regulator’s justification that halting the plan would allow a detailed examination of the offer was devoid of merit because of at least three reasons.

First, there’s no evidence to show that the premium plan, offering high-speed data to high-paying, post-paid wireless customers, is adversely affecting its other users. The two sets of subscribers are getting data speed and other features in accordance with the schemes and price bands they have opted for, and therefore there’s no case for discrimination here. Second, several plans with differential pricing and varying data speed have been around in fixed-line broadband without being questioned. If fixed-line offers do not upset the principles of natural justice, wireless premium plans should not. Globally, telcos have similar offers for both wireless and fixed line, which is in line with the market dynamics in any other service sector.
 

Third, Trai’s argument that the telcos may have been violating the net neutrality rules through the premium plans does not hold. According to the basic principles of net neutrality, Internet service providers must be able to connect users to all lawful content on the Internet equally, without giving preferential treatment to certain sites or services. Net neutrality also forbids an operator from throttling data speed for any online service while mandating that all content should be treated the same way. Since the premium plans offered by the telcos are not blocking access to online content or reducing the speed for other users, net neutrality is not being violated. Also, if the regulator found the premium tariff plans objectionable, it should have engaged with the telcos earlier. Vodafone Idea’s RedX plan was launched as early as November 2019 and the Trai diktat came eight months later in July, after Reliance Jio filed a complaint. By blocking the plans without hearing out all parties in the matter, the Trai action showed a bias that goes against the overall interests of the telecom industry.

Trai, which has been allowed to continue with its enquiry, should make an effort to get to the bottom of the issue before the TDSAT hears the case again on August 17. The point is that both Bharti Airtel and Vodafone Idea have just about 5 per cent post-paid customers in their subscriber base. In that context, they are unlikely to hurt their own business by reducing the data speed for a majority of the users. The 95 per cent pre-paid user base continues to earn these telcos their bread and butter and they can ill-afford to lose them to rivals. Reliance Jio, on the other hand, works on a fully pre-paid model and would logically aspire to get a portion of the high-paying post-paid pie of the other two operators.