Reliance Jio Withdraws Free Data Offer on Telecom Regulator’s ‘Advice’

Jio says it will accept the telecom regulator’s advice and will discontinue the complimentary benefits given under the ‘Summer Surprise’ offer. However, users who have already signed up will continue to enjoy free data for next three months.

Commuters are reflected on an advertisement of Reliance Industries' Jio telecoms unit, at a bus stop in Mumbai, India, February 21, 2017. Credit: Reuters

Commuters are reflected on an advertisement of Reliance Industries’ Jio telecoms unit, at a bus stop in Mumbai, India, February 21, 2017. Credit: Reuters

New Delhi: After 200 days worth of promotional offers, Reliance Jio’s free data bonanza has come to an end. The company, on Friday, withdrew its three-month ‘Surprise Summer’ free data offer after the Telecom Regulatory Authority of India (TRAI) strongly advised the Mukesh Ambani-backed telecom player to do so. 

Hours after TRAI’s communication, Jio issued a quick statement saying that it was “in the process of fully complying with the regulator’s advice”.

“Today, the Telecom Regulatory Authority of India (TRAI) has advised Jio to withdraw the 3 months complimentary benefits of Jio Summer Surprise. Jio accepts this decision,” the company said.

Reliance plans on withdrawing the three months complimentary benefits under its ‘Summer Surprise’ offer “as soon as operationally feasible” over the next few days.

Curiously, however, the company maintains that all customers who have already subscribed to its Jio Prime service and the Jio Summer Surprise offer “prior to its discontinuation will remain eligible for the offer”. In other words, users who managed signed up over the last six days will enjoy free data for the next three months.

How does Jio’s offer work?

The ‘Summer Surprise’ offer is the latest in a series of promotional plans announced by the company.

From September 2016, when Reliance Jio officially launched its services, the company has come out with a number of promotional plans that allowed it to offer its services for free. The first promotional offer (Welcome Offer) was valid until December 31, 2016 while the second promotional offer (Happy New Year offer) was due to end March 31, 2017.

In February 2017, the company announced its Jio Prime service, which was priced at a recurring annual fee of Rs 99. The Jio Prime service allows users to access the company’s services (online movie streaming, music streaming etc) for free and also gives access to better-bang-for-the-buck voice and data packages. By the end of March, the company announced that it had “over 72 million” customers who had signed up for Jio Prime.

At this point, many analysts had predicted that Reliance would find a way to extend its free data offer. One week ago, on cue, the company announced that its users could sign up for a “Summer Surprise” offer which would give them another three months of complimentary data (free 1GB data per day at 4G speeds). They could sign up for this new offer by acquiring a Prime membership and choosing the company’s monthly Rs 303 plan. If users did this, they would get to enjoy free data services until the end of June, 2017. The Rs 303 plan that users paid for would only kick in from July 1, 2017 – after the three months of free data got over.

Consequently, the deadline to sign up for Jio Prime was extended until April 15, 2017. After TRAI’s advice, this deadline extension and the complimentary benefits under the Summer Surprise offer has now been discontinued.

However, crucially, Reliance Jio has said that people who had already signed up for the Summer Surprise offer (sometime between March 31 – April 6) would get to avail of the free data. It also warns that it will take a few days to the offer.

TRAI problems?

Over the last few months, The Wire has reported on and analysed the corporate and regulatory battle over Reliance Jio’s pricing strategy. Critics of the company have argued that Jio’s promotional offers violated the telecom regulator’s past orders on how promotional schemes can be offered. In particular, incumbent operators such as Airtel and Vodafone have argued that Reliance Jio’s promotional offers violate a 2002 TRAI letter that restricts the validity of such offers to 90 days.

The Department of Telecommunications (DoT) has also taken a similarly negative view. Before he moved onto becoming India’s ambassador to the World Trade Organisation, former telecom secretary JS Deepak had lashed out at TRAI for not curbing Reliance Jio’s offers and had said that the free data offers had hurt the government’s collection of licence fees, spectrum usage charges (SUC) and service tax; all of which are based off a company’s revenue.

The battle over Reliance Jio’s free pricing strategy has spilled over from the DoT and TRAI to regulatory bodies such as the Telecom Disputes and Settlement Tribunal (TDSAT) and even the Competition Commission. The telecom regulator, under chairmanship of R S Sharma, has over the last two months been reluctant to clamp down on Reliance Jio’s promotional offers. In fact, less than a month ago, TRAI had argued before the TDSAT that Reliance Jio had not violated any rules by refusing to charge for its services.