No reference from DoT on floor price issue yet: Trai chief

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Published: November 15, 2019 6:52:21 PM

The government has constituted a committee of secretaries to explore a financial bailout package for the telecom sector.

telecom department, Trai Chairman, RS Sharma, DoT, Bharti Airtel, BSNL, MTNL, Vodafone IdeaLast month, when the high-level panel was set up, an official source had said that sector regulator Trai is expected to examine prescribing minimum charge for voice and data services, which will ensure long-term viability and robust financial health of the sector.

The telecom department has not yet approached the regulator for its views on floor price for tariffs, Trai Chairman RS Sharma said on Friday. “We have not received anything,” Sharma said when asked if the Department of Telecom (DoT) has approached Telecom Regulatory Authority of India (Trai) for its opinion on floor price or minimum tariff fixation for mobile services. The government has constituted a committee of secretaries to explore a financial bailout package for the telecom sector. Last month, when the high-level panel was set up, an official source had said that sector regulator Trai is expected to examine prescribing minimum charge for voice and data services, which will ensure long-term viability and robust financial health of the sector.

In fact, this is not the first time that floor price is being talked about in telecom industry circles. Way back in 2017, certain operators had initially suggested fixation of minimum floor price for voice and data services, but Trai had subsequently ruled out imposition of minimum floor price saying industry had, after discussions, agreed that it is “not a workable idea”. The older telecom operators like Vodafone Idea and Bharti Airtel are currently staring at massive financial outgo in unpaid statutory dues after the Supreme Court last month upheld the government’s way of calculating the telecom revenue, on which licence fee and spectrum charges are computed.

Also read: If govt doesn’t give relief to telcos like Vodafone Idea, it could lose over Rs 2 lakh crore

As per latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies.

The Supreme Court has allowed three months to the affected telcos to pay amounts due to the DoT, and earlier this week the government shot-off notice to telecom operators to pay their revenue share dues within the timelines stipulated by the court. The department has given option to telecom operators to clear all the dues on self-assessment basis.

On Thursday, India’s two leading telecom operators Vodafone Idea and Bharti Airtel reported a whopping combined loss of Rs 74,000 crore for the second quarter ending September 2019, mainly on account of statutory dues arising from recent Supreme Court order on AGR.

While Vodafone Idea posted a loss of Rs 50,921 crore — the highest-ever quarterly loss by any corporate in India — Airtel reported loss to the tune of Rs 23,045 crore. Both have made provisions for their liabilities arising from the Supreme Court order in their latest September quarter results.

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