The Telegraph
Thursday , July 24 , 2014
CIMA Gallary

Trai makes caution call to cell firms

Khullar: Action time

New Delhi, July 23 (PTI): Telecom regulator Trai today warned that it would review operators’ freedom to fix mobile call and service rates if they increased tariffs beyond the current base rates.

“I do not expect headlines tariff to change. If they change, as and when they change, I have told the industry, then the regulator reserves its right to go back and look at it again if forbearance should be continued or not. I am being open, there is nothing to hide,” Trai chairman Rahul Khullar said here.

He was responding to a question on the possible changes in mobile rates following the recent recommendations by the Telecom Regulatory Authority of India on issues such as spectrum sharing and the lowering of maximum rates on leased lines that could lead to cost saving for mobile operators.

Base rates, or headline tariffs, are the maximum call or service rates that a telecom operator can charge to its customers, but normally companies charge less than these rates. At present, most of the telecom operators have fixed a base rate at 2 paise per second.

The regulator gives a free hand to fix telecom call and service rates as it feels that competition in the market will keep control on tariffs.

“It’s a separate matter, if (spectrum) sharing leads to lower cost they may be able plough it back or they may want to put that cost in to larger profits. Better yet if they can use to service debt. All telecom operators are in heavy debt and debt has to be paid, otherwise what will happen to banks,” Khullar said.

Trai has recommended that the government should allow the sharing of all categories of spectrum held by telecom companies for mobile services.

If this recommendation is approved, telecom operators will be able to bring down the cost of ownership of radiowaves, which has increased to about five times compared with its price of Rs 1,658 crore under the old licensing regime.

Khullar said mobile rates were low earlier because telecom operators were trying to lure the customers of their competitors, and in the process they were offering calls at rates less than their actual costs.

DTH norms

Trai today recommended the extension of the licence period of direct-to-home (DTH) operators to 20 years, while proposing bringing down fees to 8 per cent of the adjusted gross revenue.

In its recommendations on a new DTH licensing regime, Trai said vertically integrated broadcasters must be subjected to a set of additional regulations, allowing them to control only one distribution platform.