Free data packs rob govt of Rs 800 crore, says telecom secretary JS Deepak

Price wars that have been an ongoing affair in the telecom industry have resulted in the fall of government revenues from Rs 3,975 crore which was the license fee in the June quarter to Rs 3,186 crore in the December quarter of the current financial year, the letter said. The 'promotional offers' have resulted in the government losing out on Rs 800 crore in revenues

The telecom regulatory board has also got into trouble with the Department of Telecommunications and the telecom tribunal – TDSAT for the price wars in the industry. Photo of MD, Mukesh Ambani. Image Source: Reliance Jio

As telecom subscribers make merry with the showering of free data tariff plans, outgoing telecom secretary JS Deepak on Thursday in a report by Economic Times said that the government has been robbed of Rs 800 crore.

In his letter to the Telecom Regulatory Authority of India (TRAI) Chairman, RS Sharma, Deepak has put forth an urgent plea to ‘revisit and review its tariff orders in the larger interest of the government revenues as well as the telecom sector,’ the report quoted him saying.

The promotional tariff plans that last for 90 days have been on the rise since new entrant – Reliance Jio stepped in in September offering its users free services.

After 170 days RJio will now start charging its customers from April 1.

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Price wars that have been an ongoing affair in the telecom industry have resulted in the fall of government revenues from Rs 3,975 crore which was the license fee in the June quarter to Rs 3,186 crore in the December quarter of the current financial year, the letter said.

In its third quarter financials, Bharti Airtel reported a 55% fall in profit as compared to the corresponding period of the previous year.

Idea Cellular reported a net loss of Rs 385.5 crore in its third quarter ended December 31, 2016, stating that free voice and mobile data promotions of Mukesh Ambani's Reliance Jio as main reason.

The telecom regulatory board has also got into trouble with the Department of Telecommunications and the telecom tribunal – TDSAT for the price wars in the industry.

On February 6, TDSAT asked TRAI to clarify whether newcomer Reliance Jio had informed the regulator as well subscribers about its two free offers -- Welcome Offer and Happy New Offer -- being "distinct" from one another.

DoT asked TRAI to implement its own tariff orders of June 2002 and September 2008, which mandate that the telecom service operators must not offer the services below the interconnect usage charges, which is fixed by the government.