Telcos write to TRAI, seek floor tariffs for mobile data plans

All the current telecom providers in the private sector are in complete agreement that TRAI be requested to regulate tariffs by setting a floor price for data.

Published: 03rd December 2019 05:41 PM  |   Last Updated: 04th December 2019 10:16 AM   |  A+A-

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Express News Service

NEW DELHI:  The Cellular Operators Association of India (COAI) on Tuesday sought urgent prescription of minimum tariffs for mobile data plans across the country. In a letter to RS Sharma, chairman of the Telecom Regulatory Authority of India (TRAI), the industry association claimed that while rationa-lisation of levies may provide a semblance of relief, "the real and sustainable remedy can only be the increase in tariffs". 

Since voice telephony is considered an essential service and would need to continue under the current forbearance regime, COAI said that "the only option available is the prescription of a minimum tariff for mobile data services". "All the current telecom providers in the private sector — Bharti Airtel, Reliance Jio and Vodafone Idea — are in complete agreement that TRAI be requested to regulate tariffs by setting a floor price for data," the association’s director general Rajan Mathews wrote. 

The association has also submitted a list of suggestions agreed to by its members on the issue. These include requests to fix an effective date for withdrawal of existing plans; ending the mandatory six month-long tariff protection requirement; create a new system requiring tariffs to get prior approval from TRAI; institute floor prices for all categories of data services; a gradual increase in said floor tariffs; clear instructions on how tariffs should be determined for both prepaid and postpaid plans and a provision for review of the system after three years. 

The request for mobile data-only floor tariffs comes just days after all the three telcos mentioned above announced significant increases in prices, averaging around 25-35 per cent, but ranging up to as much as 50 per cent in some cases. 

Bharti Airtel and Vodafone Idea are faced with mammoth liabilities arising from the Supreme Court’s ruling that Adjusted Gross Revenue (AGR), on which levies like license fees and spectrum usage charges are calculated, should include non-telecom revenues too. While Airtel and VIL have estimated liabilities of around Rs 35,000 crore and Rs 53,000 crore respectively, Reliance Jio has a liability of around Rs  13 crore. The apex court has directed that the payments be made within three months of the October 24 ruling. 

"Our member operators are committed to meeting the ambitious targets for telecom sector as set by the government. However,... all these goals require mammoth investments, with the industry not currently able to generate (revenue) as all sources of investments (equity infusion, loans and surplus of operators) have dried up," Mathews wrote. 

The association went on to point out that a tariff correction for data service will "not be out of sync" with global trends since India has the cheapest data tariffs globally. "Data tariffs in India are around 50 times lower than tariffs of major developing and developed economies," COAI said.

The association also noted that since the current level of competition in the industry is "fierce", it isn’t possible for any operator to make "tariff corrections" voluntarily. "Thus the only option available is the prescription of a minimum tariff for mobile data service by the Authority… We request that this should be done as soon as possible," Mathews wrote.

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