The Telecom Regulatory Authority of India (TRAI) is planning to direct Reliance Jio and Bharti Airtel to stop offering unlimited 5G data in their tariff plans, according to a report by Financial Express. This action follows an examination by the regulator into a recent complaint of predatory pricing against the two operators by Vodafone Idea.
While Vodafone Idea accused the two telcos of having significant market power and claimed that their 5G tariffs were predatory, TRAI concluded that the tariffs cannot be considered predatory since they are not below cost. However, TRAI believes that offering unlimited data as part of any plan goes against the fair usage policy (FUP) principle of tariff regulations, and therefore, the two telcos should stop it.
What is the Fair Usage Policy, and Why Does It Matter?
The Fair Usage Policy (FUP) is a principle of tariff regulations that limits the amount of data a user can consume at full speed. If TRAI issues this directive, Jio and Airtel will be able to continue with their data plans at 4G rates, but will have to reduce the speed to lower limits if the data is consumed before the new billing cycle begins. The principle of FUP applies to 4G plans and should also apply to 5G tariffs. When subscribers exhaust their data limit before a new billing cycle begins, telecom service providers reduce the data speeds to 64 Kbps under 4G plans.
What Will Happen to Jio and Airtel's 5G Tariff Plans?
Jio and Airtel will have to stop offering unlimited data as part of any plan, as TRAI has concluded that it goes against the FUP principle of tariff regulations. If the directive is issued, both telcos will be able to continue with their data plans at 4G rates, but with reduced speeds after the data limit is exhausted. This change may affect customers who use a lot of data, but it will ensure that the telcos follow the regulations and do not engage in predatory pricing.
What Does This Mean for 5G in India?
Both Airtel and Jio have reached over 3000 5G City mark, respectively. This directive will not affect the availability of 5G services in India but will ensure that telcos follow the regulations and do not engage in predatory pricing. This move by TRAI may also encourage healthy competition in the market, as other telcos will have a level playing field to compete with Jio and Airtel.
In conclusion, TRAI's directive to Jio and Airtel to stop offering unlimited 5G data in their tariff plans is a move to ensure that telcos follow the regulations and do not engage in predatory pricing. While this change may affect customers who use a lot of data, it will ensure that telcos follow the FUP principle of tariff regulations. This move may also encourage healthy competition in the market, as other telcos will have a level playing field to compete with Jio & Airtel.