TC raises concerns of incumbents over promotional tariff

The inter-ministerial panel Telecom Commission today asked the regulator Trai to implement orders on promotional mobile tariffs in "letter and spirit" amid spat between incumbents and new entrant Reliance Jio.
It also asked Trai to review existing rules to ensure financial growth of the industry, an issue that incumbents -- Airtel , Vodafone and Idea Cellular -- have raised after the launch of Reliance Jio offering free voice and data.
"The commission today 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 government gets share from revenue earned by telecom operators.

The source said that the decision was taken after the presentation on revenue trend in the sector by the Department of Telecom, which showed a decline of 10 per cent to around Rs 500 crore between second and third quarter of the current financial year.

However, no telecom operator was specifically discussed during the meeting, the source added.
"The commission noted that there are about Rs 1.5 lakh crore of spectrum auction installment 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 installments, banking sector FDI and rural roll out of telecom networks," the source said.
The telecom sector witnessed entry of Mukesh Ambani led Reliance Jio when it launched trial phase of 4G services on September 5, 2016. The new entrant started offering free unlimited 4G mobile broadband 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. The incumbents approached Trai against free service of Jio but the regulator has given clean chit to the new entrant.
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.