Telcos urge regulator to fix floor price for data, voice services

Revenues have fallen due to free services of Reliance Jio

Telecom service providers on Thursday sought an imposition of a floor price for voice and data services in a meeting with regulator TRAI.

The suggestion assumes significance as it comes at a time when top telcos have been voicing concerns over decline in their revenues as a result of free services offered by Reliance Jio for about seven months post its launch.

“Some operators suggested that a minimum price model for both voice and data services… no operator should be able to offer data or voice services below the floor price,” TRAI Chairman R.S. Sharma said.

He, however, stressed that the regulator has not taken any view on the subject and there needs to be a discussion on the topic.

“Ultimately, floor price will depend on different variables the technology, the utilisation of network, volumes etc… It is a complex issue. We have agreed with the operators that we will have more deliberations on the issue,” Mr. Sharma said.

The operators argued that telcos offering below cost tariffs to consumers over a period of time may harm the industry and its financials.

Mr. Sharma said that keeping a floor price may be contrary to forbearance on tariffs, under which the regulator has allowed operators to fix their own tariffs on grounds that there is enough competition in the market.

‘Not unanimous’

While he stated that this proposal was not unanimous, he did not comment on which operators made the suggestion. The TRAI Chairman spoke to reporters after meeting telecom industry representatives, including Bharti Airtel MD & CEO (India & South Asia) Gopal Vittal, Idea Cellular MD Himanshu Kapania, Vodafone India CEO Sunil Sood, Reliance Jio Head for Strategy and Planning Anshuman Thakur.

Mr. Sharma said other suggestions from operators included reduction in Goods and Services Tax rate on telecom services, reduction in licence fee and spectrum usage charges and extending the deferred spectrum payment liabilities over longer period. Promotion of wireline infrastructure was also discussed in the meeting. Trai has already given its suggestions on a number of these issues.

“One of the issues on which there was a unanimous view was that of giving infrastructure status to the industry,” Mr. Sharma said.