TRAI pushes for transparency with customers

On 18 September 2020, the Telecom Regulatory Authority of India (TRAI) issued two directions (Directions) dealing with publication and advertisement of tariffs by telecom service providers (TSP) with an aim to increase transparency in tariff plans. 

Background

TRAI released the Telecommunication Tariff Order (TTO) in 1999 for the first time with a view to regulate tariff of telecommunication services throughout India. Under the TTO, tariff for majority of telecom resources is under ‘forbearance’, signifying that TRAI had refrained from prescribing tariffs or ceilings in respect of such services and allowed the prices to be dictated by market forces and competition between TSPs.

However, the TTO also enunciated that prices must be based on regulatory principles such as transparency. This meant that all necessary information relating to the tariff should be provided to the customer in order to enable them to make an informed choice. To this end, TRAI further amended the TTO in 2018 to include a definition of ‘transparency’ to mean “the disclosure of all relevant information of every tariff plan by the service provider which enables the consumer to make an informed choice”. Further, the TTO required that the disclosed information pertaining to tariff should be inter alia “accessible, accurate, comparable, complete, distinct and identifiable, explicit and non-misleading, simple and ambiguous”.

Despite the above measures, TRAI has noted that TSPs are not adequately highlighting additional terms and conditions pertaining to tariff plans or that such information is ambiguous and inaccessible, where transparency measures adopted by TSPs are not as transparent as they should be. Further, in addition to conventional tariff plans, several TSPs also offer innovative tariff plans such as Special Tariff Vouchers (STV), Combo Vouchers (CV) and add on packs with insufficient information and details. The Directions have been passed by TRAI to inter alia address these shortcomings.

Key directions passed by TRAI

In exercise of its powers under the Telecom Regulatory Authority of India Act, 1997, TRAI has passed the following directions:

Comment

The issuance of Directions by TRAI is certainly a step in the right direction to bolster customer confidence and equip them with relevant information. This will essentially enable customers to make informed decisions, which may otherwise not be possible due to “lack of information, misleading information or unclear or hard to find information”.  In the era of cut- throat competition in the telecom industry, transparency in respect of tariffs is quintessential. Such measures will also foster healthy competition amongst TSPs, which will ultimately benefit all stakeholders in the ecosystem.

-       Harsh Walia (Partner) and Shobhit Chandra (Principal Associate)

For any queries please contact: editors@khaitanco.com