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Options sought on floor rates

Trai sought comments on floor tariffs by January 17

  • Published 18.12.19, 12:48 AM
  • Updated 18.12.19, 12:48 AM
  • a min read
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Bharti Airtel has been leading the demand for a floor rate for the viability of the sector that had seen bottomlines of the incumbent players taking a hit following the free voice calls and dirt cheap data from Reliance Jio. (Shutterstock)

The Telecom Regulatory Authority of India (Trai) on Tuesday floated a consultation paper relating to the fixing of minimum or floor rates for mobile calls and data.

The telecom regulator has so far followed a policy of forbearance with regard to tariffs wherein it gives the service providers the freedom to fix the rates.

However, on Tuesday Trai said that over the last few months, certain concerns have been raised about the health of the domestic telecom sector and there have been calls to fix a floor price for telecom services.

Bharti Airtel has been leading the demand for a floor rate for the viability of the sector that had seen bottomlines of the incumbent players taking a hit following the free voice calls and dirt cheap data from Reliance Jio. Recently, the three players had raised tariffs.

While Trai sought comments on floor tariffs by January 17, it posed several questions to the stakeholders and others.

Comments have been sought on the need for a regulatory intervention at this stage when the service providers have increased their tariff recently. It also wanted to know the methodology that should be used to fix a floor price.

Trai pointed out that given the fact that that cost of delivery of telecom services is likely to be different for different service providers, what parameters should be considered to decide a floor price.

Further, it wanted to know if there was a need to fix a floor price for mobile data service and, if so, can such a price be applied uniformly to different categories of subscribers such as a retail or a corporate consumer.