Trai unlikely to intervene in tariffs, floor price for now: Report3 min read . Updated: 27 Nov 2019, 09:25 PM IST
- The floor price was among key issues flagged by the industry representatives at a meeting today to chalk out the regulatory agenda for 2020
- Any fresh move on floor prices does not make sense, given that operators have already announced plans to hike tariffs in coming days, experts said
NEW DELHI : With large telecom operators planning a rate hike in coming days, Trai is unlikely to make an immediate intervention on tariff issues, including fixation of any floor price as of now, people familiar with the matter said
People aware of Trai's views on the issue said that making any fresh move on floor prices or intervention does not make sense at this point, given that operators have already announced plans to hike tariffs in coming days.
The sources told PTI that any move by Trai now may "derail" the process which has been initiated at the operators' end. The regulator considers intervention to be the "last resort".
As operators have already announced that they will increase tariffs, Telecom Regulatory Authority of India (Trai) will wait to see how the entire situation unfolds.
The floor price was among key issues flagged by the industry representatives at a crucial meeting held at Trai on Wednesday to chalk out the regulatory agenda for 2020. A section of the industry wanted a regulatory intervention by Trai on the tariff issue, the sources said.
According to industry sources, older operators attending the meeting told Trai that tariffs may require a "regulatory intervention" as the sector faces excessive competition which makes it difficult for players to raise prices of mobile services. Hence, they felt that a regulatory intervention will be desirable and that fixing floor price on tariffs by Trai would be a more effective mechanism.
However, they said, there is no decision in Trai on floor price as of now, and any call on the issue will be taken only at a later date. The regulator is in the process of finalising its agenda for 2020, and 6-7 issues are expected to be taken up in the coming year.
Issues that have been flagged by the industry for inclusion in Trai's 2020 agenda are tariff floor price, redefinition of adjusted gross revenue (AGR) and infrastructure sharing, among others.
It is pertinent to mention here that telecom operators have announced plans to hike rates in the coming days, although they have not indicated just how much the tariffs will increase. On November 18, Bharti Airtel and Vodafone Idea announced a hike in mobile phone call and data charges from December saying the increase was warranted for viability of their business.
The following day, billionaire Mukesh Ambani's Reliance Jio said it will increase mobile phone call and data charges in the next few weeks in compliance with rules.
Bharti Airtel, Vodafone Idea and other telecom operators have to pay ₹1.47 lakh crore in outstanding statutory dues following a Supreme Court order on October 24 that upheld the government's position on including revenue from non-core businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fees to the exchequer.
In the case of Bharti Airtel, the liabilities added up to nearly ₹35,586 crore, of which ₹21,682 crore is licence fee and another ₹13,904.01 crore is the SUC dues (not including the dues of Telenor and Tata Teleservices). For Vodafone Idea, this number stands at a cumulative ₹53,038 crore, including ₹24,729 crore of SUC dues and ₹28,309 crore in licence fee.
The government, last week, threw a ₹42,000 crore lifeline to debt-laden telecom companies after it agreed not to take any payments for spectrum they use for the next two years. It has, however, expressed unwillingness to intervene in the Supreme Court-mandated statutory payments. It wants operators to make combined efforts to relieve the stress, including raising voice calls and data tariffs.