Telcos have provided over Rs 600-crore benefits to prepaid customers: COAI to Trai

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Published: April 10, 2020 6:20:29 AM

It further said this would amount to an unjustified subsidy at a steep loss to the industry and would also dissuade other customers from recharging, who at present are recharging dutifully using digital and non-digital means.

It must be mentioned that Trai on March 29 had asked all the telecom operators to extend the validity of talk-time of their pre-paid subscribers so that they continue to get uninterrupted services.It must be mentioned that Trai on March 29 had asked all the telecom operators to extend the validity of talk-time of their pre-paid subscribers so that they continue to get uninterrupted services.

The Cellular Operators Association of India (COAI) has written to the Telecom Regulatory Authority of India (Trai) that they have provided benefits worth over Rs 600 crore to prepaid customers in terms of validity extension and additional talktime, and most of the users at the bottom of the pyramid have been covered and they continue to get connectivity. If the government and regulator feel there is a need to provide further benefit, then it should be provided in the form of subsidy to the telecom sector like many other essential services, and this could be compensated from the USO fund where more than Rs 51,500 crore is lying unutilised as on March 31, 2020.

The letter is in response to Trai’s follow-up directive to them not to selectively provide benefits but make it uniform for all pre-paid users.

FE had earlier reported that since the extension of validity by the telecom operators during the lockdown does not cover the entire 2G user base, it was causing problems to a section of customers. Roughly, of the total 500 million 2G users, around 200 million have been left out of this facility.

COAI’s letter is on behalf of its members including Bharti Airtel, Vodafone Idea and Reliance Jio. It said that customers who actually required support from telcos for continuation of their services in the initial period of lockdown are in the range of 80-100 million, whereas the operators have collectively extended the benefits to 280-300 million. “The Authority and the government would appreciate that the industry not only provided this benefit to the needy subscribers but also gone well beyond as an abundant provision. We are therefore taken aback to see the letter issued by the Authority to our members,” COAI director general Rajan Mathews said in reply to Trai.

COAI further said Trai should keep in mind the dire financial situation of operators and business viability of its member operators should be given balanced consideration appreciating the fact that millions of the Indian workforce rely directly on the functioning of telecom operators.

It must be mentioned that Trai on March 29 had asked all the telecom operators to extend the validity of talk-time of their pre-paid subscribers so that they continue to get uninterrupted services. Based on the directive, telecom operators like Bharti Airtel, Vodafone Idea and Reliance Jio extended the validity of pre-paid users till April 17 and credited an additional Rs 10 talk-time in their accounts; it was done on a selective basis. But as the regulator was not satisfied with the measures, it wrote another letter to the telcos on April 7 asking to provide benefits to all prepaid users.

“At present the sector finds itself in a very unstable situation reeling under huge debts and the current scenario of the sector is under a question due to business viability… the financial stress have been acknowledged by all and Trai has also issued a consultation paper on floor prices,” COAI said.

The telcos said adequate measures have been taken by them to ensure that those who genuinely require support due to unavailability of options to recharge have been extended support. “While operators have been careful to adopt a calibrated approach…we cannot believe it is the intention of Trai that such benefits should be indiscriminately provided to even those privileged ones who are well able to afford such services and need no incentives or provisions to avail of continued mobile services,” COAI said.

It further said this would amount to an unjustified subsidy at a steep loss to the industry and would also dissuade other customers from recharging, who at present are recharging dutifully using digital and non-digital means.

Telcos have made adequate recharge options available in the last few days and also launched programmes to incentivize users to recharge for other users. Alternate channels like bank ATMs, pharmacies as well as a wide network of groceries stores have also been activated.

“However, if the authority and government feels there is a need to provide further benefit, including providing benefit to all prepaid feature phone subscribers, then this should be provided in the form of subsidy to the telecom sector…this could be compensated from USO Fund where more than `51,500 crore is being lying unutilized,” COAI added.

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