Jio withdraws surprise offer on TRAI order
NEWDELHI: Reliance Jio Infocomm Ltd said on Thursday that it was withdrawing its “summer surprise” offer of free services in April-June, heeding a directive from the the Telecom Regulatory Authority of India (TRAI).
Under the offer, all Jio Prime members making their first recharge payment of ₹303 (or higher) got three months’ complimentary services in addition to the benefits offered under their tariff plan.
“Jio accepts this decision. Jio is in the process of fully complying with the regulator’s advice, and will be withdrawing the 3 months complimentary benefits of Jio Summer Surprise as soon as operationally feasible, over the next few days,” the company said in a statement.
All customers who have subscribed to the offer prior to its discontinuation will remain eligible for the offer, added Jio.
Telecom companies have protested against the freebies offered by Jio since its launch in September, when it made voice calls free for a lifetime; it also offered free data until the year-end, later extending it until March 31.
The Telecom Commission recently asked TRAI to implement “in letter and spirits” its 2002 decision, which restricted the validity of promotional offers to 90 days, and a 2008 order, under which all operators were required to state the eligibility criteria for such offers and the duration for which they are valid.
Free services offered by Reliance Jio eroded the profitability of telecom operators during the quarter ended December 31.
The Telecom Commission is also worried about declining licence fees, spectrum usage charges (SUC) and service tax collections from the industry.
Licence fee collection declined to ₹3,166 crore in the December quarter from ₹3,584 crore in the preceding three months. SUC declined to ₹1,553 crore from ₹1,820 crore during the period.
The commission observed that any fall in industry revenue will impact investment and loan repayment capacity, which may result in defaults on loans and spectrum purchase charges owed by operators to the government.
Since Jio’s launch, the telecom industry has lost about 20% of its revenue, India Ratings and Research Pvt Ltd said.
“It will be interesting to see how many people will stick with Jio now. Now, exact pricing game will start,” Dharmesh Kant, head of retail research at Motilal Oswal Financial services Ltd, said.