Telecom Comm to Trai: Review rules on tariffs for telecom sector growth

Commission discussed the decline in revenue of telecom industry in 2nd and 3rd quarter

The inter-ministerial panel Telecom Commission on Wednesday asked the sector regulator Trai to implement orders on promotional mobile tariffs in "letter and spirit" and review existing rules to ensure financial growth of the industry.

"The commission on Wednesday discussed decline in revenue of telecom industry in second and third quarter. This is the first time revenue of the sector has declined.

The commission has decided that Trai may be apprised of commission's concern and implement its own order and direction on tariffs in letter and spirit and also review existing rules for orderly financial growth of the sector," a source said.

It is one of the functions of Telecom Regulatory Authority of India to ensure orderly growth of the sector and therefore commission desired that the regulator should be asked to look at necessary changes to be made in its existing policy or regulation to protect financial health of the sector, the source added.

The source said that the decision was taken after the presentation on revenue trend in the sector by the Department of Telecom noticed a decline of 10 per cent to around Rs 500 crore between second and third quarter of ongoing financial year and no telecom operator was specifically discussed during the meeting.

"The commission noted that there are about Rs 1.5 lakh crore of spectrum auction instalment due, and the sector is under debt of Rs 4.5-5 lakh crore. Any adverse impact on the revenue may adversely impact payment of instalments, banking sector FDI and rural roll-out of telecom networks," the source said.

The telecom sector witnessed entry of new operator Reliance Jio when it launched commercial 4G services on September 5, 2016. They started offering free unlimited 4G mobile broadband during its trial phase and continued it even after the commercial launch on December 31, 2016.

Jio later extended the free service with limited data usage but it has announced that phone call on its network will be free for lifetime.

As per India Ratings and Research, the telecom industry has lost about 20 per cent of revenue due to Reliance Jio's free services.

Aditya Birla group firm Idea Cellular and Anil Ambani-led Reliance Communications posted their first-ever consolidated net loss during the October-December 2016 period.

Bharti Airtel's consolidated net profit dropped by more than half at Rs 503.7 crore in the October-December 2016 as compared to Rs 1,108.1 crore in the corresponding quarter of 2015-16. Vodafone too posted a decline of 4.7 per cent in its India revenue.

Besides this, the commission approved setting up of a spectrum research and management institute with outlay of Rs 70 crore for 3 years.

The commission has also approved changes in tender of Comprehensive Telecom Development Plan for the North-Eastern Region (NER) following failure to attract interest of bidders for the Rs 3,100 crore government aided project.