Jio opposes BSNL, MTNL suggestion for floor price exemption

Reliance Jio has opposed the suggestion of BSNL and MTNL to exempt telecom operators having less than 15 per cent market share from minimum rates for phone calls and data services.

The telecom major has also said till the time mobile call termination charges are applicable in the sector, there should be restriction in offering free outgoing calls on competitor's network.

"We also oppose the BSNL/MTNL suggestion on exemption from floor when the market share based on VLR subscriber is less than 15 per cent, as the same is totally untenable, (and) would in fact promote inefficiencies and the intended objectives would not be met if the revised tariff regime is not implemented uniformly across all operators," Jio said in its comments to Trai on fixing floor prices.

The Telecom Regulatory Authority of India (Trai) is holding consultations with interested parties over fixing a minimum price for call and data services following demand from the industry.

Both the public sector telecom companies have suggested that telecom companies with less than 15 per cent market share should be exempted from charging minimum fixed price for call and data services.

According to Trai data for December 2019, BSNL has 10.26 per cent and MTNL 0.29 per cent market share in mobile services, while Jio leads the market with 32.14 per cent market share.

At present, telecom companies are free to decide on call and data rates but due to stiff competition, they have sought regulatory intervention.

Mobile subscribers get access to 4G data at a price as low as Rs 3.5 per GB but if the floor price is fixed as demanded by telecom operators, mobile internet prices will rise 5-10 times from the current level.

Debt-ridden Vodafone Idea has proposed that the minimum price of data should be fixed at Rs 35 per GB, Bharti Airtel has proposed minimum price of Rs 30 per GB for low data users and Reliance Jio wants it to be hiked gradually to Rs 20 per GB.

Vodafone Idea (VIL) in its counter comments reiterated the need for fixing floor price for telecom services.

It said that Trai should choose between "short term tariff correction that are presently below costs and a long term monopoly".

According to VIL's submission, it will take three years for the company to restore its revenue levels after minimum tariff regime is introduced.

"Trai may also consider what it would be like to have a virtual monopoly and what will be the fall-out on the consumers including connectivity, prices, security, innovation, impact on Government exchequer and unduly high dependency on one or two players for this critical sector which is in nature of an essential service and of critical importance to India's security," VIL said.