Vodafone Idea issued show cause notice by Trai for RedX premium tariff plan

Kolkata: The Telecom Regulatory Authority of India (Trai) on Tuesday evening issued a show cause notice to Vodafone Idea, asking why it shouldn’t ban the company’s RedX premium tariff plan that the regulator said appeared to be making false claims about offering faster data speeds and, in turn, misleading consumers. The regulator has given time till August 31 for the telecom operator to respond.
Trai though has not sought any explanation from Bharti Airtel, after the Sunil Mittal-led telco modified its Platinum tariff plan by taking out both the faster data speeds and priority network elements from the offer, and filed a revised plan with the sector regulator. “We’ve pointed out to VIL (Vodafone Idea Ltd) in the show cause notice that its fundamental claim of offering faster data speeds to RedX customers appears to be bogus as the telco has not been able to prove in the first place to the authority’s technical team that it is actually possible to offer the promised faster data speeds to RedX consumers,” a senior Trai official told ET.

Trai has also pointed out that “VIL has not been transparent in its communications” to customers on its inability to actually guarantee faster data speeds to RedX customers, the official said. The notice is seen as the first step towards stopping the RedX plan, said officials. The regulator, the senior Trai official said, “saw no immediate issues with Airtel after the latter removed the faster data speeds and priority network elements from the original Platinum plan and filed a revised version".

VIL and Airtel did not reply to ET’s emailed queries till press time Tuesday. Trai has been opposed to the idea of telcos charging consumers a premium for faster data speeds and fragmenting the 4G information highway on a tariff-wise basis. VIL, which introduced the plan last November, has much to lose if RedX is barred as it already has almost 130,000 users, who may switch to rivals, say experts. The telco is expected to fight legally any ban on its plan. Airtel wouldn't have been hit hard as it had started the Platinum plan only on July 6 and had much fewer subscribers.

Trai had suspended the RedX and Platinum tariffs on July 11. VIL had challenged it in the Telecom Disputes Settlement & Appellate Tribunal (TDSAT), which stayed the regulator’s order and allowed the telco to continue acquiring RedX customers. Airtel, which did not challenge Trai’s blocking order, had agreed to comply with the regulator’s final ruling. Trai has been examining the matter after a complaint by Reliance Jio on July 8. Jio had urged the regulator to check if the RedX and Platinum tariff offers violated consumer interests and were misleading claims to market their services.

Last week, Trai sought more time from the TDSAT to conclude its ongoing inquiry into whether RedX and Platinum tariffs degraded the quality of services of VIL and Airtel users on other non-premium offers. The appellate tribunal has granted Trai three weeks and will hear the matter on September 10.