Incumbent telecom operators like Idea and Bharti Airtel on Thursday urged Trai to fix a minimum floor rate for voice and data as they look to counter newcomer Reliance Jio’s free calls offer, a suggestion that the regulator said it will look into.
If the Telecom Regulatory Authority of India or Trai indeed sets a floor price for tariffs, it would mark the end of free voice and data dole-out to mobile consumers.
This is because operators would then have to abide by the prescribed “floor” in their tariff offerings.
“There is an interesting idea that was presented by some of the operators...Of creating a floor price for voice and data. It is an idea and we will deliberate on it,” Trai Chairman RS Sharma said after emerging from a two-and-a-half hour meeting with senior officials of telecom companies.
Sharma admitted that floor price fixation may be contrary to the current practice of tariff forbearance and emphasised that the regulator had “no views” on the matter just yet.
Sources said that the floor price was suggested by Idea Cellular at the Trai meeting today and seconded by other large incumbent operators Airtel and Vodafone.
Tariffs are currently under forbearance meaning that operators are only required to report their plans to Trai within seven days of launching them.
Sharma explained that some operators felt that offering “below cost services” over a period of time was hurting the financial of the sector.
It may be recalled that Mukesh Ambani promoted Reliance Jio had stormed into the telecom market last year, wooing customers with promotional free voice and data services. Jio still offers aggressive data plans and has promised that voice calls will always be free on its network.
In fact, Jio’s promotional freebies for seven months is blamed by incumbent operators for the financial woes of the sector. The industry’s debt stands at Rs 4.6 lakh crore.
Asked about the merit of mulling floor price at a time when a large operator is giving free voice calls, Sharma said discussing an idea does not mean that a decision has been taken on the matter.
“Trai follow a democratic and consultative process...We believe in discussions and open consultation, arguments and counter arguments,” he said.