Telecom regulator Trai on Thursday said it will study a suggestion of having a mandated floor price for voice and data services.
The suggestion came from Idea Cellular, Vodafone and BSNL. Idea and Vodafone are suffering heavy losses after the launch of free voice plans by Reliance Jio in September last year.
The idea was mooted during a two-and-a-half-hour meeting that the regulator held with various telecom companies to understand their financial strain as well as take suggestions on how to improve health of the sector that is reeling under heavy debt and losses, especially after Jio started its service.
Top operator Airtel is understood to have stayed away from the demand of a floor price. Jio did not support the proposal and rather spoke about the need for having open-market competition.
Telecom tariffs in India are currently under forbearance and companies are free to decide on consumer offerings. Sources said fixation of a floor price, if approved, would mean that companies would need to get tariffs cleared by Trai for various plans, something that most of the players will not be comfortable with in a hyper-competitive industry.
Jio had started its services with a bang when it announced lifetime free voice on its network. The company’s decision had disrupted the financial model of the telecom industry as leading players — Airtel, Vodafone and Idea Cellular — were getting 70 percent of their revenues through voice tariffs.
Jio’s plans, while being followed by the rivals, were also challenged by them in Trai and fair-play regulator Competition Commission of India (CCI) for being “predatory” in nature. However, both the regulators did not find any merit in the issue, and allowed Jio to continue with its free-voice offering.
Other issues raised by the older operators in the Trai meeting included reduction of licence fees. They also said that spectrum usage charges (SUC) payable to the government should be lowered, while payments towards Universal Service Obligation Fund (USOF) should be removed.
By Baishakhi Dutta
