Mukesh Ambani promoted Reliance Jio Infocomm Ltd on Thursday said that regulator Telecom Regulatory Authority of India (Trai )has asked it to withdraw its “Summer Surprise”offer.
Under the offer, all Jio Prime members making their first recharge payment of Rs 303 (or higher) plans got three months complimentary services in addition to the benefits of their purchased plan.
“Today, the Telecom Regulatory Authority of India (TRAI) has advised Jio to withdraw the 3 months complimentary benefits of JIO SUMMER SURPRISE,”the company said in a statement.
“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.
However, all customers who have subscribed to JIO SUMMER SURPRISE offer prior to its discontinuation will remain eligible for the offer, it added.
To be sure, telecom companies have been at loggerheads over Relaince Jio’s promotional offers, which first started in September and later was extended until 31 March. India’s Telecom Commission had asked Trai to implement its decision on promotional tariffs issued in June 2002 and September 2008 in “letter and spirit”.
Trai’s 2002 order restricts the validity period of promotional offers to 90 days while the 2008 order stated that all service providers need to state the eligibility criteria for such offers and the duration in which the offers are valid.
Free services offered by Reliance Jio that eroded the profitability of telecom operators during the quarter ended 31 December.
Telecom Commission is also worried about declining licence fees, spectrum usage charges (SUC) and service tax collections from the industry.
Licence fee collection has declined to Rs3,166 crore in the December quarter from Rs3,584 crore in the preceding three months. SUC declined to Rs1,553 crore from Rs1,820 crore during the period.
The commission observed that any fall in industry revenue will impact industry’s investment and repayment capacity, which may result in defaults on loans and spectrum purchase charges owed by operators to the government.
Since Reliance Jio’s launch, the telecom industry has lost about 20% of its revenue, India Ratings and Research said, revising its sectoral outlook for 2017-18 to “negative”.
”It will be interesting to see how many people will stick with Jio now. Now exact pricing game will start. I don’t think it will be a big negative for Jio as tariffs that they have rolled out are more or less at par with the industry. I expect dust to settle down and a clearer picture to emerge for the future of the industry,” Dharmesh Kant, head of retail research at Motilal Oswal Financial services Ltd.
Reliance Jio has more than 100 million subscribers and around 72 million Prime Subscirbers, who are essentially paying for its services.