National roaming to cost less from 1 May as Trai lowers tariff ceiling2 min read . Updated: 10 Apr 2015, 08:42 AM IST
According to the new order, telcos can charge customers a maximum of 80 paise a minute for making calls, and 25 paise per message to send messages
New Delhi: The Telecom Regulatory Authority of India (Trai) has lowered the ceiling on tariffs for calls and messages when a subscriber is travelling within the country.
The move, which will be welcomed by subscribers, could further squeeze the balance sheets of telcos.
The new tariff ceilings will be applicable from 1 May, and will only be for national roaming services that are provided to subscribers while travelling outside the coverage area of their home network, according to the Trai order.
Trai last reviewed the tariff ceiling in June 2013.
In February, it proposed the new tariff caps.
At the time, Trai said it wanted to cap outgoing call rates at 65 paise a minute.
The rates announced on Thursday are marginally higher.
According to the new order, telcos can charge customers a maximum of 80 paise a minute for making calls, and 25 paise per message to send messages.
Last month, telcos asked Trai to refrain from reducing the ceiling and requested for an extension on the deadline to introduce national number portability.
By 3 May, the telcos will have to provide their subscribers with the ability to port or move to another network provider without having to change their mobile number, even if the subscriber moves to another circle.
The lower charges could hurt telcos that have paid a lot of money for spectrum.
“These ceiling tariffs are good for the consumer but will hurt the profitability of telcos given the high price they have had to pay for spectrum," said Hemant Joshi, partner, Deloitte Haskins & Sells LLp.
In the auction that concluded 25 March, telcos bid ₹ 1.1 trillion for spectrum.
Roaming accounts for approximately 6% (around ₹ 8,000 crore) of industry revenues, according to a March report by Sunil Tirumalai and Chunky Shah, Research Analyst with Credit Suisse Securities Research and Analytics.
Shares of the three major listed telcos fell on Thursday after Trai released its new order. Bharti Airtel Ltd saw its shares fall 3% to ₹ 406.80 while Idea Cellular Ltd shares fell 2.29% to ₹ 187.75, at the close of trading, on a day when the benchmark Sensex closed at 28,885.21 points, up 0.62%.
Trai said the telcos do not need to provide two rate plans for roaming subscribers—one with free incoming calls and one without—as ordered in the earlier rules of June 2013.
Instead, the telcos can now provide a special roaming tariff plan that involves a fixed fee with incoming voice calls on national roaming remaining free.