Reliance Jio Infocomm has not violated any rules by offering voice services free on its network and there is no rule that prescribes the minimum tariff that an operator should charge, nor can it be called predatory, says the government.
"Since the guidelines / NIA for allocation or auction of spectrum do not prescribe the rates at which services are to be provided to customers, the question of violation of guidelines for spectrum allocation does not arise," telecom minister Manoj Sinha informed Parliament on Wednesday in a written reply.
The Telecom Regulatory Authority of India (Trai) had also given a clean chit to the Mukesh Ambani-led telco saying that Reliance Jio's tariff plan filed with the telecom sector regulator ''cannot be considered as IUC non-complaint, predatory and discriminatory.''
Early last month, incumbent telcos, including Bharti Airtel, Vodafone India, Idea Cellular and Telenor India, had complained to Trai that by offering services below the minimum interconnect rates of 14 paise a minute, Jio was violating the Telecom Tarriff Order.
According to the telcos, calling out of Reliance Jio's free voice and data packs were below market prices, and therefore were 'predatory in nature and contravenes the regulator's Telecom Tariff Order (TTO) of 2004.
Telecom operators are required to pay 14 paise per minute for each outgoing call from their network to the operator on whose network the call finally lands, called the Interconnection Usage Charge (IUC).
However, according to the ministry, the tariff regulatory regime, which is based on the principles of forbearance, allows service providers flexibility to decide various tariff plans or products for different service areas of their operation.
"Tariffs can therefore be offered by service providers to counter the competitive tariffs of their competitors or any other prevailing market conditions," the ministry said, adding that Trai keeps close watch on the telecom tariffs being offered in the market and intervenes, if required, to ensure that the regulatory guidelines are met.
In a highly competitive market telecom service providers should have some flexibility in fixing tariffs, says the ministry.