New Delhi, April 23: In a move to stop all predatory pricing in the telecom sector, the Telecom Regulatory Authority of India (Trai) has asked Reliance to stop its 40 paise STD tariff from May 1. A similar letter to Bharat Sanchar Nigam Ltd is on its way.
The move comes soon after the regulator issued letters to the cellular operators ordering them to hold in abeyance their new tariff schemes that reduced their airtime for cell-to-cell STD calls to 50 paise per minute and waived the airtime on international calls.
The regulator had asked them to justify the cost cuts which, it felt, amounted to predatory pricing to retain consumers who might be tempted to switch over to the limited mobility service being offered by Reliance and BSNL.
Trai’s letter to Reliance will quell the howls of protest over the regulator’s discriminatory attitude towards limited mobility players. But for Reliance it is a major blow since it knocks over the unique selling propostion (USP) of the latest entrant in the beep business.
Already, Reliance has been having trouble raising the critical mass of customers to launch its limited mobility service whose commercial launch has been delayed by close to five months.
Just a couple of days ago, it said it would be revamping its direct selling approach to find customers for its mobility service after the three-year plan that bundled a tariff package with the handset failed to rustle up the ambitious numbers the company had targeted.
Sources in Reliance said, “We were prepared for this and can reply to the query. In any case, the service is not fully active and, hence, it will not be a problem if Trai asks us to revise the tariff. But we are confident of continuing with STD at 40 paise.”
Meanwhile, the cellular operators led by Bharti, Idea and Hutch made a written submission to Trai chairman Pradeep Baijal.
In the submission, the operators said, “It should be appreciated that because of the predatory tariff by some of the operators, the subscriber bases of cellular operators are constantly being eroded and this continues on a day-to-day basis. In case we are not allowed to introduce the new competitive rates in the market, it would be difficult for us to survive.”
“We reiterate that we should be allowed to offer the prices and a detailed explanation has been sent to you in reply to your notice,” states the submission.
The cellular operators have also pointed out that the tariff announced by them complies with the interconnect user regime (IUC) prescribed by the regulator while the tariffs announced by the other operators do not.
A Bharti spokesperson said, “We are complying with the instructions of the regulator. We have provided the justification to the the authority and hope that regulator will take a considerate view.”