Govt Refuses To Fix Minimum Tariff For Telecom Companies; No Floor Price As Of Now
Floor pricing, according to the Telecom Regulatory Authority of India (TRAI), is not the best method to help the Telecom Companies right now. The financial viability of all telecom operators is not in jeopardy.
Also, the floor pricing should not be implemented solely to save one particular company.
Why Vodafone Might Need Floor Tariffs?
Setting a floor tariff, according to a TRAI official, is currently unfeasible.
According to Bharti Enterprises Chairman Sunil Bharti Mittal, setting a floor price is not required at this time.
A floor tariff helps with tariff increases, also result in higher average revenue per user (ARPU) and better cashflows. A floor tariff might help a company like Vodafone Idea (Vi) right now.
However, it is not the sector’s true need.
Floor Price Is Not The Need For All The Telecom Operators
According to the Telecom Regulatory Authority of India (TRAI), the floor pricing should not be implemented solely to save one particular company.
It may help the company in earning more money but at the same time, it will entirely derail plans and tactics for providing low-cost services like Reliance Jio.
“We were always of the opinion that setting up a floor for tariff would not be feasible. This is a cumbersome process,”
The Telecom Regulatory Authority of India (Trai) official told ET.
“The Cabinet-approved relief package is more important than seeking a floor price that may only be done in a scenario when the financial health of all telcos remain in bad shape,” the official said.