Telecom cop signals floor rates
Telecom sector regulator Trai on Thursday dropped broad hints that it may be open to the idea of setting a minimum tariff for calls and data to ensure the viability of the sector.
The Telecom Regulatory Authority of India (Trai) had, in the past, vehemently opposed any intervention by the regulator in setting either cap or floor tariffs, and the U-turn came a day after Bharti Airtel head Sunil Mittal reportedly pressed the telecom secretary for setting a floor or minimum rate for data.
At the AVIA India Video 360 event here, Trai chairman R. S. Sharma said telecom tariffs have been under forbearance for the last 16 years and is now looking at a renewed industry demand for fixing a floor price.
Free voice calls and dirt cheap data by billionaire Mukesh Ambani’s Jio has wrecked havoc on the industry, which squeezed finances to match them.
“It is only recently that telecom companies have together written to us that regulate us, so it’s for the first time,” he said.
“In the past, in 2012, I remember they had opposed tooth and nail the Trai’s proposal to regulate tariffs. They said tariffs must be left under forbearance,” he added.
Sharma said the regulator was focused on the three principles of consumer protection, fair competition and growth of the industry.
Trai had, in the past, allowed telecom companies to decide tariffs and stepped in only when operators sought intervention from the regulator.
“But if there are certain market failures, certain aberrations, if one of the objectives, like consumer protection, is not being met with, then obviously we will have to think of ways to ensure that these objectives are met with,” he said.
Sharma said the telecom companies in 2017 had given a proposal, asking the regulator to fix a floor price, which Trai had observed to be a “bad idea”.
The proposal surfaced again after the October 24 ruling of the Supreme Court that upheld the government position on including non-telecom revenues in calculating statutory dues.
After the ruling, Bharti Airtel, Vodafone Idea and other telecom operators have to pay Rs 1.47 lakh crore in past dues.
Mittal met telecom secretary Anshu Prakash on Wednesday after which he reportedly said setting a floor for tariffs was important. The telecom czar said tariff needs to go up and the industry needs to become viable.