Trai cracks down on Jio’s free service offers

Indian telecoms regulator Trai has finally ordered an end to disruptive new operator Reliance Jio Infocomm’s practice of offering free services to customers as promotional exercises.

The regulator has instructed Jio to withdraw its Summer Surprise offer, which would have entitled new customers to three months of free services upon making their first recharge payment of at least 303 rupees ($4.70).

The regulator has declared that the offer does not fit with India’s regulatory framework covering promotions, which places limits on the duration that discounts can be offered.

Jio has announced it will comply fully with the order, but that customers who have already signed up for the offer will remain eligible.

Jio’s latest offer follows an initial promotion providing completely free services that had run for three months, and was subsequently expanded for a further three. This aggressive strategy helped the operator sign up over 100 million customers  in less than six months of commercial operation.

Rival operators had objected to the offer extension, but Jio had insisted that the second offer represented an entirely new promotion and so did not violate the regulations limiting promotions. At the time, Trai sided with Jio, but this latest decision indicates that the regulator’s patience is wearing thin.