Reliance Jio has opposed the suggestion of Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) on the issue of fixing floor prices for telecom services. Earlier, in their response to the Telecom Regulatory Authority of India’s (TRAI) consultation paper on the issue, BSNL and MTNL had suggested exemption of telcos having less than 15 per cent market share from minimum rates for phone calls and data services.
As per Jio, the move is totally untenable and would in fact promote inefficiencies and the intended objectives would not be met if the revised tariff regime is not implemented uniformly across all operators.
Further, Jio has also said till the time mobile call termination charges are applicable in the sector, there should be restriction in offering free outgoing calls on competitor’s network.
Meanwhile, the Internet and Mobile Association of India (IAMAI) has termed fixing a floor price for telecom services to be completely illogical and not required in the market.
To this end, it urged the TRAI to continue its present position of forbearance by not actively intervening in tariff fixation. Further, IAMAI suggested that TRAI should let the market forces determine future pricing.
As per the association, fixation of floor pricing will not address the key issues of the telecom sector. Further, it added that in order to address the issues, the regulators must identify and remove unfair cost advantages in the forms of spectrum fees, interconnection charges, etc.
It also added that the floor price will need to be based on the cost of the provision of service. As different telecom service providers (TSPs) have different cost structures and different cost of delivery of services, the selection of a representative cost is problematic. It also added that the recent hike of rates by all three telcos prove that they are responsive to market realities and there exists no evidence of market failure based on which any tariff regulation by way of floor price may be justified.
IAMAI said that in order to empower the marginalised section of the country, there is a need to provide affordable internet connectivity to rural India.
Criticising the move IAMAI also added that such a suggestion reflects cherry-picking by telcos targeting potential high revenue services while ignoring low revenue services.