The “arbitrary charges” being levied by telecom operators on SMS don’t indicate a cartelization among telecom companies according to Telecom Regulatory Authority of India (Trai).
A few days back Supreme Court issued notices to the Centre and Trai on a plea seeking its direction to the government to fix cost-based tariff as cap for SMSes in view of “arbitrary charges” being levied by telecom operators.
“Telecom is such a competitive sector that the services have become heavily commoditized and anything one does in (increasing) rates looks identical. This doesn’t mean cartelization,” a senior official of Trai said requesting anonymity.
He, however, said that the body will look at the notice issued by the Court and form a detailed view on the same while going to the Court.
A bench headed by Chief Justice Altamas Kabir had issued notice to Trai while hearing a PIl which pleaded that the Government and the sector regulator, that’s Trai, should put a cap on the tariff of telecom services and the companies should not be allowed to levy termination charges (TC) for SMSes.
It has asked the Government and Trai to file their replies within four weeks. Termination charges are paid by an operator from whose network calls or SMSes originate to the one on whose network these communications are made.
The PIl filed by a registered society Telecom Watchdog alleged that operators, through bilateral agreements, have started raising the tariffs arbitrarily, taking advantage of the situation of reduced competition after the cancellation of 122 licenses by the apex court on February 6, 2012. It said that operators are “doing this illegal activity in a cartelized manner”.
In case of SMS, the cost of terminating a communication is negligible and therefore, Trai had left it to the operators. Till now, all the operators had been following Bill-And-Keep method, that means zero TC.
However, of late, certain operators are trying to put a base price of a minimum of 10 paisa per SMS by way of imposing a levy of 10 paisa per SMS under the guise of TC. This increases the cost of SMS exponentially and if the practice continues SMS service will be unviable and unaffordable for consumers.
According to the PIl, SMS rates have been increased by as much as 50 per cent in the last one year, inflating consumer’s bill by many fold. Telecom Watchdog had also alleged that it continued to alert Trai about the tariff hike, which has so far been unable to take an action against these operators.