Vodafone Idea Accuses Reliance Jio, Bharti Airtel Of Predatory Pricing: Report

Kumar Mangalam Birla-backed Vodafone Idea has accused Mukesh Ambani-backed Reliance Jio and Sunil Bharti Mittal-led Bharti Airtel of predatory pricing with their unlimited 5G offerings. Vodafone Idea has called upon the telecom regulator - Telecom Regulatory Authority of India (TRAI) to act against Reliance Jio and Bharti Airtel saying that they being significant market players cannot offer 5G for free and that too for an unlimited time, The Economic Times reported citing officials aware of the details.

TRAI sought responses from Jio and Airtel and both of them have denied the allegations levelled by Vodafone Idea and said that they cannot be called out for offering predatory pricing as 5G currently has a very small user base.

Both of them have also argued that they are not offering 5G for free as it is being given out as part of 4G packs and added that cost of providing 1GB of 5G data is cheaper than that of 4G.

"We had given a notice to them (Jio and Airtel). They have given replies and we will make a decision soon. Currently, the legal team, finance team and technical team of Trai are studying the matter," an official told The Economic Times asking not to be named.

In 2016, after the launch of commercial services by Reliance Jio, Bharti Airtel and Vodafone Idea had accused Jio of predatory pricing and now Jio has grown to become the largest telecom player in the country.

Jio and Airtel have been expanding their user base since then at the expense of Vodafone Idea by offering 5G services while, Vodafone Idea has not announced any timeline of launching 5G services as it is burdened by financial stress.

A telecom company can be considered as doing predatory pricing if a company having 30 per cent market share offers below cost services in a specific market. However, since the cost of 5G is not yet calculated it will be difficult to identify the tariffs that are below cost.

Meanwhile, Jio and Airtel have told TRAI that 5G data plans are truly unlimited but their usage has not been very high.