TRAI Says Telcos Want It to Fix Minimum Price for Voice Calls, Data

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TRAI Says Telcos Want It to Fix Minimum Price for Voice Calls, Data
Highlights
  • TRAI said telcos have suggested fixation of minimum floor price of tariff
  • Telcos offering low-cost tariffs over a time period may harm the industry
  • Reliance Jio ascribed the financial stress in the telecom sector recently

Telecom regulator TRAI on Thursday said certain operators have suggested fixation of minimum floor price for voice and data services. Fixing of a floor price by TRAI, if it happens, could end the days of free voice and data offers for consumers by operators.

Telecom Regulatory Authority of India (TRAI) Chairman R S Sharma said this is a new idea that has come from some operators, and will be examined by the regulator.

"We have not formed any view of this. We are open and consultative," he added.

He, however, did not comment on whether the suggestion had been made by incumbent operators. Sharma admitted that floor price may be contrary to TRAI's stance of forbearance on tariffs, but said minimum price issue will have to be "deliberated".

He said the operators had argued that telcos offering below cost tariffs to consumers over a period of time may harm the industry and its financials and therefore, were rooted for a minimum floor price.

He added that other suggestions from operators included rationalisation of GST, reduction in licence fee and spectrum usage charges and extending the deferred spectrum payment liabilities over a longer period.

While TRAI has already given its suggestions on a number of matters, including licence fee reduction, the proposals given by operators today fall under three broad areas - IUC, tariff principles and ease of doing business, all of which are under consultation by the regulator, Sharma said.

The incumbent operators have been vocal about the onslaught of free voice and data offers by the aggressive newcomer Reliance Jio (RJio) and its impact on the industry's revenue in FY2016-17.

Reliance Jio earlier this week, however, ascribed the financial stress in the telecom sector to existing operators like Bharti Airtel and Idea running businesses on debt and investing heavily in unrelated sectors.

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