Airtel, Jio, Vi Can Be Allowed To Increase Data, Voice Tariffs; No Floor Prices By TRAI?

From October 1, a new chairman will be assuming office at Telecom Regulatory Authority of India (TRAI). 

Now, TRAI won’t go through with the proposal of fixing floor prices for both data and voice tariffs as it is not needed now, said the sources.

Read on to know more…

The Snippet of the Backstory!

Last month, the telecom industry experts had said that lower taxes and fixing floor price can help restore the debt-ridden telecom companies in India.

According to the Centre, when the telcos raised the tariff by 50% in December 2019, the financial health of the telecom sector is looking up as their average realization per user increased. Coupled with the Supreme Court granting the telcos’ permission to pay their adjusted gross revenue (AGR) dues in installments over a span of 10-year is a further relief.

Currently, the tariffs are under forbearance and the operators can raise the tariffs. As it may seem anti-consumer, the government or the regulatory authority is not keen on fixing any kind of floor price.

The previous chairman of TRAI, RS Sharma, who superannuated on September 30, had started the consultation process for the floor price issue. However, the COVID-19 pandemic halted the open-house sessions and Sharma refused to conduct online open-house sessions.

What Will Happen Now?

With the new chairman assuming office he can either-

1. Freshly examine the issue and begin a new consultative process,
2. Take ahead the consultation process begun by RS Sharma 
3. May address the issue in different ways or have different priorities or
4. Drop the issue altogether

According to sources, the TRAI chairman PD Vagehla is likely to first examine whether the issue needs to be taken forward as a lot of time has passed since the first consultation paper was put forth. 

The government feels that with the COVID-19 pandemic-induced work-from-home culture, has led to a rise in data usage, which in turn has led to telcos making a profit. Hence, it makes no sense to fix a floor price for tariffs as it would be seen to be anti-consumer.