Telcos seek Trai’s intervention for setting up floor price of data services

Incumbent telecom carriers — Bharti Airtel, Vodafone Idea and Reliance Jio have asked the sector regulator to set up floor pricing for data services soon, and added that due to fierce rivalry, tariff correction was not possible voluntarily by any carrier.

“Telecom service providers in the private sector namely Bharti Airtel Limited, Reliance Jio and Vodafone Idea Limited are in complete agreement that TRAI be requested to regulate tariffs by setting a floor price for data services,” the Cellular Operators Association of India (COAI) director general Rajan S Mathews in a letter dated December 3, 2019, to the Telecom Regulatory Authority of India (TRAI) chairman Ram Sewak Sharma said.

Delhi-based COAI represents India’s telecom service providers and network vendors excluding state-run Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL).

Mathews added that floor pricing should be determined as soon as possible.

“Necessary orders as per the statutory provisions of the TRAI Act be issued urgently. We expect tariffs to be regulated and decided by TRAI will ensure that the telecom industry remains healthy and robust,” the letter seen by ETT added.

The group also said that the tariff correction in the current level of fierce competition would not possible by any service provider voluntarily, and the only option available is prescription of a minimum tariff for mobile data service by the regulator.

The financially-strained telecom sector, sitting on a debt of more than Rs 7.5 lakh crore, is further stressed following the recent adverse Supreme Court verdict asking telecom companies to pay due to the government settling a decade-and-a-half dispute on the interpretation of Adjusted Gross Revenue (AGR).

In the September quarter, Bharti Airtel and Vodafone Idea together posted highest loss of more than Rs 75,000 crore.

On the back of falling average revenue, the service providers have already increased voice tariffs with Fair Usage Policy (FUP) limits which is, however, expected to give a marginal boost to their falling revenues.

The telecom body, citing Trai data said that overall average revenue per user (APRU) has come down from Rs 141 in 2010, to Rs 118 in 2017, and to Rs 80 a month.