Consumers, not revenue, should be priority, Trai tells Telecom Commission

Counters Telecom Commission's argument that reduced tariffs are lowering government revenue

The Telecom Commission's arguments that reduced tariffs and promotional offers are lowering government revenue and hitting financials of the sector are "inconsistent" with public policy objectives, the Telecom Regulatory Authority of India (Trai) has said.

In response to the Commission's letter of last month, the Trai is also learnt to have stated that consumer interest is "critical" to good regulation and cannot be substituted by revenue maximisation.

It is a well-known fact that lower tariffs help increase penetration of telecom services in rural and remote areas, the Trai has said in its letter to the Commission.

Affordable services and consumer interest are some of the key elements of the National Telecom Policy 2012, which "surprisingly appear to have been overlooked and maximisation of Government revenue, which is not one of the objectives of NTP, has been given centre stage by the Telecom Commission in its letter dated February 23, 2017", it added.

The Telecom Commission had expressed concerns on the "serious impact" of promotional offers on the financial health of the sector and the capability of telcos to meet their contractual commitments, including payment of instalments for spectrum purchased, and repayment of loans.

The war of words between the two bodies comes against the backdrop of telecom tariff wars following the entry of Reliance Jio few months ago, offering free voice and data.

Incumbent cellular operators have said that Jio's freebies have hit the profitability of telecom companies. They have moved telecom tribunal TDSAT against the regulator's decision to allow Jio to continue with its promo offers.

“It is a well known fact that lower tariffs help in penetration of the telecom services in the rural and remote areas of the country where tele-density still stands at 53.27 per cent compared to urban tele-density of 170.15 per cent,” reproted the Indian Express.

The regulator also said its recommendations asking for reforms like reducing the licence fee from 8 per cent to 6 per cent, making SUC flat to 3 per cent and later to 1 per cent, increasing the duration of deferred payment spectrum amount to 20 years from the current 10 years, were not implemented by the department of telecom, which is to be blamed for the health of the industry.