Telecom regulator TRAI has slapped a showcause notice on Vodafone Idea Ltd over its pay-more-for-priority treatment mobile plan, saying the tariff offer "lacks transparency", is "misleading" and not in compliance with regulatory framework.
TRAI had been probing the Vodafone Idea Ltd (VIL's) priority plan. The watchdog has issued an elaborate 17-page notice to the telco asking it to explain by August 31, "as to why appropriate action should not be initiated against it for violating the extant regulatory framework by its RedX tariff plan...".
"The RedX Tariff offer lacks transparency and is misleading and not in compliance with regulatory principles of tariff assessment contained under Telecom Tariff Order, 1999 as amended from time to time," TRAI has said in the showcause notice seen by PTI.
When contacted, VIL declined to comment on the showcause notice.
A TRAI source said that if the regulator is not satisfied with the VIL's response, it may issue a direction to the company to stop the priority plan.
Bharti Airtel was not issued a showcause notice for its platinum plan, which was also under the regulator's lens, a source said. Airtel had offered to abide by TRAI's views and also voluntarily modified its platinum offering suitably, and hence TRAI is not proceeding with further investigation on that, the source said.
Telecom Regulatory Authority of India (TRAI), in showcause notice to Voda Idea, said it is of the view that the "claim of VIL for providing `Priority 4G Network with faster data speeds' is not in compliance with the extant regulatory framework...".
It said that the RedX tariff offer is in contravention of specific clauses of the Telecom Tariff Order relating to protection of interests of the consumers. VIL's RedX tariff offer "violates the terms of license agreement" and is not consistent with stipulated technical specifications, TRAI said adding that it also did not comply with the service quality norms.
Over the past weeks, TRAI had been probing Vodafone Idea's priority plan RedX and Bharti Airtel Platinum Offering to see if network preference to specific customers leads to deterioration of services for other non-premium subscribers or violates any norms.
VIL launched 'RedX' tariff offer in November 2019 and subsequently modified it in May and June 2020. The plan included a promise to the customers for provision of 'priority 4G network with faster data speeds'.
TRAI had asked VIL to explain how it was offering priority 4G network with faster speeds in technological terms, demonstrate the delivery of the faster speeds, and effect on data speed experience of non-RedX customers.
The showcause notice, which follows several rounds of questioning by the regulator, pointed out that VIL failed in demonstrating the actual delivery of the faster speeds to RedX subscribers.
"... it is observed that VIL has failed to demonstrate that individual RedX post-paid plan customer is getting faster data speed which is being promised to such customer in much publicised promise of `Priority 4G Network'," TRAI said adding the promised benefits to RedX plan customers was not ascertainable in many cases.
The regulator said that "VIL's failure to communicate about the conditions under which priority in the networks shall be available in unambiguous terms is likely to induce the consumer to subscribe to a tariff plan, which he may not have subscribed to but for such misleading advertisement".
TRAI said the claim of faster speed by VIL did not satisfy the primary requirement of being consistent with the regulatory principle of transparency. "...the offer suffers from lack of transparency and constitutes an attempt to lure customers based on an unclear promise, and therefore goes against consumer interest," it said.
The regulator flagged over a dozen complaints from individual consumers on RedX offer in a short span of time, "broadly related to migration to RedX tariff plan without prior consent, non-communication of exit fee of Rs 3,000 in a transparent manner and customers not experiencing any significant change in the data speed".
TRAI noted that allocation of disproportionately higher capacity of resources to RedX subscribers, in order to prioritise network for them, would "certainly adversely affect" the availability of resources to non-RedX subscribers leading to "deterioration in delivery of services to them".
The notice said in case VIL does not submit written explanation within the stipulated deadline of August 31, "the matter shall be proceeded with the assumption that Vodafone Idea Limited has nothing to state in their defence".