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Writer's pictureaarattrika chanda
Aug 184 min read

Telecom Tariff Hikes by Jio, Airtel And Vi In India; Legal analysis

By Tinku Garg


Abstract

This article offers a legal review of the recent tariff increases made by the leading Indian telecom companies Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi). It examines how these rises affect market competition and consumer rights, contrasting the new rates with global norms. The examination explores the legal consequences according to the Consumer Protection Act, 2019, focusing on possible breaches caused by sudden increases in prices without proper explanation or warning. It also analyses the consequences according to the Competition Act, 2002, taking into account the potential for anticompetitive actions if telecom companies conspired to increase tariffs. The discussion involves the regulatory landscape and the respective functions of TRAI and CCI in upholding fair practices and safeguarding consumer welfare. The article highlights the importance of maintaining affordability and accessibility of telecom services in India, while adapting to changing market dynamics and technological advancements such as 5G.

Introduction

In the recent months, big telecom players Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) upped their tariff. Consumers and stakeholders that this move has sparked a debate on how it will impact the telecom sector with regard to market competition as well as consumer right etc. The rest of this article investigates these increases in tariffs, compares them with the international standards and examines their legal ramifications through both Consumer Protection Law and Competition Law.

Tariff Hikes Overview

Reliance Jio: Reliance Jio has hiked the prices of its prepaid plans as well as post-paid packs, across a wide range. For instance, 2GB of daily data with a program valid for up to 28 days now costs Rs 349, up from its previous price of Rs 299. Also, the 3-month plan used to be of Rs 666 and now it costs more by offering a daily data stroll from 1.5 GB per day at Rs 799.

Bharti Airtel: Even Airtel has raised its tariffs. The 28- day plan with 2GB data per is up to Rs 449 from earlier price of Rs 399. The 24GB annual plan which was previously priced at Rs 1799 now comes for Rs 1999. [1]

Vodafone Idea (Vi): Voda’s new rates now start at Rs 299 for a plan that currently offers 1GB of data per day with a validity of only twenty-eight days instead eighteen, while it used to cost you just only under Rs 22. These plans include 1.5GB daily data with a maximum plan validity of up to 84 days, which now costs Rs 859 from the original price of Rs ​​719.[2]

International Comparison

The updated tariffs in India although are a bang-for-your-buck compared to international standards. But repeated hikes will bring Indian tariffs nearer to kind of levels in developed markets and that will be a serious cause for worry on the accessibility and affordability front, for the average two wheeler buyer in India.

For example, in the United States this will likely be four to five times more expensive than those newly announced Indian tariffs from critical carriers such as Verizon and AT&T. Just for some context, a standard monthly plan in the US with these data limits can be anything between $50 to $70 (Rs 4000-Rs 5600), underlining that Indian tariffs are still lower even after hikes.[3]

Legal Implications

Consumer Protection: There remain questions to be answered on consumer protection arising from the tariff hikes. The Consumer Protection Act, 2019 to protect the interests of consumers and aims at providing best practices. And sharp rise in tariffs, if seen abrupt and without reasons to justify could be treated as a Consumers rights violation.

Consumers say they received no or little advanced notice, and often got a poor explanation for the increases - setting off complaints that could get regulators involved. The Telecom Regulatory Authority of India (TRAI) in this context is a key institution acting as watchdog to oversee fair practices, especially on part of the telecom sector and protecting consumer interests.

If not also, under the Competition Act of 2002: From a competition law perspective it would be interesting to understand why all players announced similar tariff hikes at almost same time and whether there is an such tacit understanding amongst major telecom players. The Act forbids anti-competitive agreements and abuse of dominant positions. If it is discovered that these telcos have, in fact, colluded in raising the tariffs then such behaviour could run afoul of the Act.

Additionally, the tariff increases could potentially render a monopolised or oligopolistic market where only few players rule which may lessen consumer choice and decrease competitive nature of markets. This would get under the scrutiny of Competition Commission of India (CCI) and it could very well investigate these practices to maintain a fair level playing field.

Regulatory environment: - The Indian telecom sector is heavily regulated, with the Telecom Regulatory Authority of India (TRAI) playing a central role in overseeing and controlling tariffs. The mandate of TRAI is to ensure a transparent, non-discriminatory and orderly tariff structure in the industry that accords with principles of fair competition. These new changes which have been imposed post an increase in tariff would apparently prompt TRAI to review and see if it is fair for the common interests of consumers based on regulatory compliance.

It may also invite the intervention of Department of Telecommunications (DoT) if increases are looked at as excessive and its effort rendering telecom services, which is perceived to be an essential service, inaccessible or unaffordable.

Conclusion

The market dynamics in the Indian telecom space have witnessed a sea change with Jio, Airtel and Vi announcing recent tariff hikes thereby necessitating an examination of legal implications. While the hikes may due to increasing costs and investment in technologies like 5G, they raise broader questions which need answers when it comes to consumer protection and market competition.

TRAI & CCI being the regulatory authority to oversee fair competition while market evolving, it is in best interest of consumers and business for a level playing field which would help create transparent network ecosystem with genuine service-based differentiation. A balance will be important to keep telecom services affordable and accessible in India, given that these are now among the most essential components of life as well as economic activity.

 


 

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