TRAI looking at setting floor price to ensure viability of telcos

Telecom sector regulator Trai on Thursday dropped broad hints that it may be open to the idea of setting a minimum tariff for calls and data to ensure viability of the sector.

Telecom Regulatory Authority of India (Trai) had, in past, vehemently opposed any intervention by the regulator in setting either cap or floor tariffs, and the U-turn in its thought process came a day after Bharti Airtel head Sunil Mittal reportedly pressed Telecom Secretary for setting a floor or minimum rate for data.

Speaking at the AVIA India Video 360 event here, Trai Chairman R S Sharma said telecom tariffs have been under forebearance for the last 16 years that have been working fine, and it now looking at renewed industry demand for fixing a floor price.

Free voice calls and dirt cheap data by billionaire Mukesh Ambani's Jio has wrecked havoc on the industry, which squeezed finances to match them.

"It is only recently that the telecom companies have together written to us that regulate us, so it's for the first time," he said. "In the past, in 2012, I remember they had opposed tooth and nail the Trai's proposal to regulate tariffs. They said tariffs must be left under forebearance."

Stating that the regulator is focussed on three overarching principles of consumer protection, fair competition and growth of the industry, he said Trai had, in the past, allowed telecom companies to decide tariffs and stepped in only when operators sought intervention from the regulator.

"But if there are certain market failures, if there are certain abberations, if one of the objectives, for example consumer protection, is not being met with, then obviously we will have to think of ways to ensure that these objectives are met with," he said.

Sharma said the telcos in 2017 had given a proposal, asking the regulator to fix a floor price, which Trai had observed to be a "bad idea".

The proposal surfaced again after the October 24 ruling of the Supreme Court that upheld the government position on including non-telecom revenues in calculating statutory dues. After the ruling, Bharti Airtel, Vodafone Idea and other telecom operators have to pay Rs 1.47 lakh crore in past dues.

Mittal met Telecom Secretary Anshu Prakash on Wednesday after which he reportedly said setting a floor for tariffs was important. The telecom czar said tariff needs to go up and industry needs to become viable.

Sharma said in 2017, the telcos were consulted and "all of them came to the conclusion that floor price is a bad idea, so regulatory intervention is not required".

"And again they have said in a couple of weeks back, so we will have to consider what to do," he said. "But what I am saying is that ideally we would not like to put any regulation, if the market is functioning in an efficient and fair manner, that is our broad principle. So, achieving the objective without doing anything is the best.