Trai to allow Jio to continue free data offer

Indian telecommunications regulator Trai has determined to allow disruptive new market entrant Reliance Jio Infocomm to continue with its free data offer, despite objections from rivals.

Trai has rejected petitions from incumbent operator Bharti Airtel as well as Idea Cellular calling for the regulator to prohibit Reliance Jio from maintaining what it calls a predatory promotional offer.

Indian regulations prevent operators from running a promotional campaign for longer than three months, and Reliance Jio has now been offering free services to subscribers for longer than this time, having recently decided to extend the offer to March 31.

But to circumvent the restriction, Jio is calling its current promotional offer the Happy New Year offer, and has argued that this was distinct from its initial Welcome offer.

Trai has now sided with Jio, finding that the new offer is a distinct promotion and cannot be considered an extension of the earlier offer. On this basis, Jio will be allowed to continue to offer free services.

Jio’s aggressive marketing is triggering a fresh price war in India, which could have a significant impact on an already hurting industry. The report cites an executive from one of the big three operators stating that if the price war continues, there will be job losses.

Operators are meanwhile exploring consolidation in order to survive in the strictly competitive environment. Indian media recently reported of a four-way merger between Aircel, Reliance Communications, Telenor India and Sistema Shyam Teleservices (SSTL).