Telcos want discussion on floor price for tariffs conducted online due to Covid

By: |
May 21, 2020 4:40 AM

Sources in Trai said that the authority will wait for some more time before deciding on conducting the discussion on floor price online, as it wants to be sure about the technology challenges.

In the case of floor price, Trai came out with the consultation paper in December and it has already received written comments.In the case of floor price, Trai came out with the consultation paper in December and it has already received written comments.

Telecom operators are soon going to write to the Telecom Regulatory Authority of India (Trai) to conduct online the open house discussion related to setting a floor price for tariffs, as organising a physical gathering would be difficult in the near future due to Covid-19. According to multiple sources, there is a consensus among all the operators that the discussion should be conducted online so that the regulations around floor price are out in the next few months.

The sources further said the Cellular Operators Association of India (COAI) will soon write a letter to Trai as this is an industry issue that needs to be resolved soon. It must be mentioned that operators and COAI have verbally conveyed their demand to Trai to conduct the discussion online, but officials in Trai feel that as the issue has wider ramifications, all the stakeholders should be given a hearing during physical discussions in various cities. Usually, Trai conducts open house discussions in multiple cities for important issues in order to evolve a broader mandate.

For instance, during its consultation on the net neutrality matter, the open house was conducted in multiple cities including Bengaluru, Delhi, etc. But operators, on their part, feel that organising an online discussion will be better as stakeholders from across the country can participate. Importantly, Trai has started conducting online open house discussions and it has received a good response so far.

Sources in Trai said that the authority will wait for some more time before deciding on conducting the discussion on floor price online, as it wants to be sure about the technology challenges. As per process around any matter, Trai usually comes out with a consultation paper seeking written comments from all stakeholders and after that conducts an open house discussion, after which it issues its recommendations or regulations. In the case of floor price, Trai came out with the consultation paper in December and it has already received written comments. Now it needs to conduct the open house discussion but it has been put on hold due to the Covid-19 crisis.

After the increase in tariffs in December, all the operators have witnessed an increase in average revenue per user (ARPU) with Bharti Airtel leading from the front. The ARPU for Airtel has risen to Rs 154 in Q4 2020 from Rs 128 in Q2. Reliance Jio’s ARPU has also risen to Rs 130.6 from Rs 120 in the same period. Vodafone Idea is yet to report its numbers but most analysts believe that ARPU for the company will be higher than Rs 109 in the December quarter.

COAI had earlier written to Trai that tariff correction in the current level of fierce competition was not possible by any service provider voluntarily, and thus the only option available was prescription of a minimum tariff for mobile data service by the Authority.

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