BSNL Cell Tariffs Have Resulted In Market Imbalance: Pvt Players

Mumbai: | Updated: Nov 29 2002, 05:30am hrs
Telecom Regulatory Authority of Indias (Trai) decision to prevent the Bharat Sanchar Nigam Limited (BSNL) from continuing with its cellular tariffs beyond the 90-day offer period has come as a welcome relief to private cellular operators, but operators say that long term measures will have to be taken to correct the imbalance caused by BSNLs introductory pricing. BSNLs tariffs, which have been described as predatory, had been vehemently opposed by the private operators.

BSNLs cellular services were launched on October 19 with the tariffs meant only for the initial 90-day period, and Trai has not allowed BSNL to extend the tariffs beyond this period. The Cellular Operators Association of India (COAI) however, says that there is no special relief as a result of Trais decision. COAI director general TV Ramachandran explained that it was not just a question of the 90-day time period. The point is that BSNLs tariffs should never have been introduced in the first place. The damage that these tariffs will create will be irreversible, he said.

The bone of contention has been the fact that there are no airtime charges if the call originates from a BSNL fixed line to a BSNL mobile. Likewise, there are no airtime charges in the case of a National Long Distance (NLD) call if the call is routed through BSNLs NLD network. It is learnt that these benefits are possible because of cross-subsidisation from BSNLs fixed line and NLD networks.

A senior official of a leading player in the cellular industry has questioned the basis on which BSNL has determined its tariffs. As a result of these tariffs, there has already been some subscriber movement towards BSNL. This has been either through churned subscribers or through BSNLs increased penetration into smaller towns in some circles. Cross-subsidisation of BSNLs services must be stopped, said the official. Bharti Televentures joint president - mobility, Manoj Kohli, agreed with this view and said there has been an impact both in the pre-paid and post-paid categories.

Analysts pointed out that BSNLs tariffs were not sustainable in the long-term anyway and the company would have to go for restructuring its tariffs. The initial pricing was clearly predatory and the cellular operators are definitely relieved about the decision taken by Trai, added Mr Kohli.