The appellate tribunal stayed the telecom regulator’s July 11 order blocking Vodafone Idea NSE 13.38 % Ltd’s RedX premium tariff plan, granting interim relief to the struggling telecom carrier. VIL shares surged 15% in intraday trade.
The order paves the way for VIL to continue adding customers to its premium RedX plan, which promises a dedicated network with priority access. The telco had moved TDSAT on July 13 after the Telecom Regulatory Authority of India (Trai) blocked the premium plan, which had been in existence for about eight months, without giving it a hearing.
Trai had also asked Bharti Airtel to suspend its similar Platinum plan until the regulator completed its inquiry and the company had said it would comply. It’s not clear if Bharti Airtel will appeal in light of the VIL decision. The company didn’t respond to queries.
The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) said Friday that the Trai directive suspending VIL’s RedX plan “lacks even prima facie reasons,” adding that the watchdog’s justification that a halt would allow detailed examination of the offer is without merit.
“During submissions, it has not been shown that for detailed examination by Trai, it is necessary to withhold/suspend the Vodafone RedX offer forthwith.” The tribunal also noted that the move had been triggered by a complaint.
“It is clear that inquiry has commenced on the basis of a letter of the applicant dated July 8, which is corroborated by several materials,” the tribunal said.
Reliance Jio Infocomm had complained to the regulator on July 8, urging it to check if the two plans complied with the regulatory framework or violated consumer interests. Trai has said the Jio complaint didn’t prompt its letter blocking the two offers. Both the RedX and Platinum offers are seen as efforts by VIL and Airtel to widen their base of higher-paying customers to boost revenues. VIL had accused Trai of “bias and malafide” in its appeal.
It said the regulator had not found, even prima facie, that the offering under its RedX plan – as filed originally in November 2019 and l ater modified in May 2020 – flouted any particular direction governing tariff rules. VIL closed nearly 13% higher at Rs 8.88 on the BSE Friday.
The RedX plan was aimed at attracting higher revenue generating subscribers and its suspension would have accelerated the migration of such users to Bharti Airtel and Jio, analysts said. Bharti Airtel started the Platinum programme on July 6.
The tribunal gave VIL until July 22 to respond to Trai’s queries to determine whether the plans caused any deterioration in quality of service to other customers. Further, it has also directed Trai to “proceed with the inquiry and pass final orders” in line with the laws after ensuring that “requirements of natural justice are satisfied and the appellant (VIL) is given opportunity to explain any alleged contravention of extant directions of the authority.”
It has also asked the regulator to consider VIL’s response “for the purpose of further enquiry.” Jio, whose application for impleadment in the case was accepted on Friday, maintained in its letter to Trai and during the TDSAT hearings that no telco can guarantee faster speeds and that such claims by the incumbents were aimed at misleading consumers. In this context, the tribunal noted that VIL, in its modified RedX plan, had only assured priority 4G network access and not higher data speeds.