State-owned telecom companies Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telecom Nigam Limited (MTNL) have told the sector regulator, Telecom Regulatory Authority of India (TRAI) that tariff fixation should be applicable only on companies with more than 15 per cent subscriber base in a service area, while those with lower or negligible user base should be exempt from the purview of minimum floor price.
In their suggestions to TRAI, the two public sector operators have acknowledged that the telecom industry is facing tough times due to sudden and unexpected entry of capital-rich Telecom Service Providers (TSP) offering free and ultra-low tariffs.
The two public service operators have also said that the trend has led to closure of many players, and that the situation has got compounded by companies required to make huge Adjusted Gross Revenue (AGR) payouts following a Supreme Court order.
"The telecom industry needs a helping hand, at least in the immediate short term, from the authority to survive," the two firms told TRAI in nearly identical submissions.The two have batted for fixing of floor prices by TRAI, but with a rider.
"...the fixing of floor price should be limited and applicable to TSPs having a minimum subscriber base of 15 per cent in that Licensed Service Area (LSA), otherwise floor price may wipe out the prospective new TSPs or TSPs having small customer base, from the telecom business altogether," BSNL and MTNL have said.
They added that to mitigate the present stress and to ensure adoption of future technologies, BSNL and MTNL both support the regulatory intervention of TRAI for tariff fixation with the condition that operators with 15 per cent or less market share in that LSA be exempt.
The operators require a minimum customer base to remain viable and survive, the telcos reasoned in their comments submitted on TRAI consultation paper on Tariff Issues of Telecom Services.
"Considering the financial health of the telecom industry and demands of major telecom service providers, BSNL feels that there is a need for a change in TRAI policy of forebearence in tariffs as a short term major," BSNL said.
BSNL, which operates telecom services across India except in Delhi and Mumbai circles, has about 10.3 per cent market share in all India mobile subscriber base.