On July 21, the Telecom Regulatory Authority of India (TRAI) has called a meeting with top executives of telecom companies to discuss and seek their views on setting floor prices for voice and data tariffs. The regulator also wants to know the industry view on the upper ceiling for tariffs, in case such a cap was necessary. Currently, there are no upper or lower ceiling prices for the tariffs. While TRAI has only fixed a ceiling for tariffs during roaming.
The demand to fix the floor prices was raised by some telecom companies last month when TRAI’s chairman met them for a discussion on the ongoing financial crisis in the sector. Since Reliance Jio’s entry, the sector is under the estimated debt of ₹4.5 lakh crore and companies are facing profit erosion. Currently, in order to compete with the newcomer, the incumbent companies like Bharti Airtel and Vodafone are providing free calls for months. However, an official at the TRAI said that an operator can offer free calls, as this was part of the original telecom tariff order, which described tariffs.
According to the sources, the issue of floor prices was raised by Idea Cellular and Bharat Sanchar Nigam during a meeting last month. Idea wants that there should be one-floor prices for voice and one for data, and the lowest cost operator data should be taken to work out the floor price. The incumbent companies also want the upward revision of interconnect usage charges(IUC). They claim that the current call-connect charges are below cost and need to be corrected. The charges currently are 14 paise per minute for wireless calls.
Most telcos are in favor of increasing the IUC, but Jio and Reliance Communications have suggested the charges be brought down to zero. The incumbent operators want IUC to be fixed on a “full-cost” basis, whereas Jio wants a “bill-and-keep” method.