Jio’s free call and data plans have cost the government Rs 685 crore

Reliance Jio Infocomm has taken the telecom sector with a boom but it comes with a price. The company’s free voice and data services have cost the government Rs 685 crore and this has prompted the Telecom Commission (TC) to consider pulling up the regulator for "jeopardising" the health of the sector by allowing the offers to continue beyond the stipulated time.

This is the first time the highest decision-making body in the Department of Telecommunications has stood up against on the duration of Jio's back-to-back promotional offers and their impact on government finances in the third quarter of this financial year.

A communiqué to Telecom Regulatory Authority of India (Trai) by commission will soon be send, reminding the regulator that its inability to implement its own orders could jeopardise the banking sector, deferred spectrum payments to the government and orderly growth of the telecom sector.

Jio's has offered free voice and data services ever since it started operating on September 5, forcing rivals Bharti Airtel, Vodafone India and Idea Cellular to slash their rates in a bid to retain customers, leading to a drop in their revenue.

Jio's offers, the commission noted, have led to downward pressure on tariffs, further leading to "lower government revenues."

"The commission has expressed its deep concerns for the health of the sector and asked the Telecom Regulatory Authority of India to implement its decision of June 2002 and September 2008 regarding promotional tariffs," a senior official with knowledge of the commission's decision told ET.

Bharti Airtel had also challenged the legality of Jio's free calls.