Call rates may fall after new telcos start: Raja

Telecom minister A Raja feels there is enough scope for tariffs to come down to a level of 20 paise per minute for local calls and 50 paise per minute for STD calls after new operators start services.

“There is a scope for reduction once the new operators start rolling out (services). Tariffs for intra circle calls may come down to 20-25 paise and national calls may come down to 40-50 paise,” Raja said here. The minister also said the country needs another 300 million telephone lines, which can be given by both existing and new operators.

There is a large scope for business to reach 750 million phone connections. There are 120 new licensees who have been allowed by the DoT to start telecom services. Unitech, Swan, Datacom and Shyam Telecom have already got spectrum and could start services once they get the network ready.

Raja said Telecom Regulatory Authority of India has been following a practice of forbearance. As per this, tariffs are determined by market forces and are not fixed by the regulator.

Justifying the presence of more players in a competitive market, the minister said, “We brought in a competitive atmosphere and that will bring down the tariffs. Is it not the responsibility of the government to introduce more competition?” At present local call rates vary from 40 paise (within an operator’s own network) to Re 1, and national call rates from Re 1 to Rs 2.65 a minute.