After nearly a decade, The Telecom Regulatory Authority of India has decided to examine the need to review the existing regime of tariff forbearance. The regulator has issued a consultation paper on the issue and has requested stakeholders offer their comments by Feb. 24, and counter comments by March 2.
The first structural review of cellular mobile tariffs was done in 2002.
“Over the last few years, the telecom tariffs were on a declining trend. However, recent trends as well as reports from the industry and analysts indicate a possible reversal of this trend. In addition, a suitable tariff framework for data services is also required considering that data usage is becoming more and more popular. In this context, TRAI has decided to examine the need to review the existing regime of tariff forbearance,” stated TRAI Secretary Rajeev Agrawal.
RCR Wireless News has recently reported about the possibility of hikes in mobile bills this year due to the problems faced by telcos allegedly under reporting revenues and other violations. Even the adverse verdict in the 2G spectrum case has increased the possibility of a tariff hike.
“In the months of December 2011 and January 2012 … a few service providers have implemented a similar hike in respect of tariff plans offered to post-paid subscribers as well. Further, there have been continuous media reports including reports from various market analysts as well as indications from the industry about a further hike in mobile tariffs,” TRAI’s consultation paper stated.
TRAI Chairman Dr J S Sarma stated that tariff forbearance has never been and is not a permanent policy followed by the regulator. However some of the recent developments, Sarma said, indicate there is perhaps a need to review the policy of forbearance in telecom tariffs.
“This consultation paper, accordingly, seeks the comments of the stakeholders on review of the existing regime of tariff forbearance and the desirable tariff regime for data services,” Sarma added.
Meanwhile, telecom operators have criticized the regulator’s latest move. Rajan Mathews, the Director General of Cellular Operators Association of India (COAI), said that TRAI’s move would adversely impact the industry.
“The industry is very upset. We are completely devastated by this sudden development – this comes at a time when the industry is reeling. We have the lowest and the most competitive tariffs in the world. Why change a policy that has served the industry so well?” Mathews was quoted as saying by the Economic Times.
The association also questioned the timing of the move by the telecom regulator.
