Trai unlikely to take up floor price issue for 2 mths over Covid-19: Report

Telecom players recently renewed their demand and asked Trai to move forward quickly on the issue of fixing floor price for tariffs

The telecom industry's fresh push on floor tariffs notwithstanding, regulator Trai is unlikely to take up the matter, even via a virtual open house, for the next two months or so, given the Covid-19 crisis and the difficulties being faced by people, a source said.

This is not an "opportune moment" to address the issue, and in any case, telecom operators are free to take decisions on tariff matters, the senior Trai official said.

As things stand today, there is no restriction on players to take independent calls on pricing issues, the official added.

When contacted, COAI Director-General Rajan Mathews told PTI that the industry is disappointed.

"Central and state governments are looking to move out of the Covid-quarantine and prompt economic activities, revive economic opportunities and jobs. While specific measures have been announced to simulate the economy, there has been no relief for the telecom industry.
 

"The absence of any other relief has prompted us to approach the regulator for help in stabilising our revenue streams," Mathews said.

Meanwhile, the Trai official argued that many low-income users who recharge for lesser amounts to make calls are facing distress due to the COVID-19 crisis and may not be in a position to withstand a tariff hike.

The industry, on the other hand, despite its financial condition, has been successful in attracting marquee investors and raising funds, even in the current circumstances. The average earning per user has also risen for large operators in the just-ended quarter, the official said, outlining the reasons behind Trai's hesitation to expedite the issue.

Moreover, conducting virtual open house for tariff floor price could end up excluding a large portion of low-income and marginal consumers who may not be tech-savvy but who will be most impacted by the final outcome of this consultation process.

"There is no question of taking it up at this point, at least for 2-3 months, till there is some stability and normalcy," the Telecom Regulatory Authority of India (Trai) official said.

The regulator resumed its customary open house discussion (OHD) on pending matters through video-conference earlier this month, but there seems to be clear consensus within Trai that the issue of floor price of tariffs should not be taken up via online mode till the Covid-19 situation stabilises.

Telecom players recently renewed their demand and asked Trai to move forward quickly on the issue of fixing floor price for tariffs, arguing that the matter is imperative to ensure that sector is sustainable and in a position to bear the deferred spectrum and AGR dues.

The Cellular Operators' Association of India (COAI) -- whose members include Bharti Airtel, Vodafone Idea and Reliance Jio -- wrote to Trai last week asking for an open house discussion to be conducted on the tariff floor price issue "at the earliest".

"While, we acknowledge that the recent situation on account of COVID-19 might have caused some constraints, however the authority has started conducting the OHD (open house discussion) through online process on various other topics. Accordingly, we request the authority to kindly hold an OHD on this issue at the earliest," COAI had said last week.

Bharti Airtel CEO, India and South Asia, Gopal Vittal in an earnings call recently also drew attention to the pending floor price issue, saying although the telecom industry has seen some bit of repair, tariffs continue to be "unsustainably low". He had exhorted the sector regulator to address the floor price issue "sooner than later".

Meanwhile, despite the nudge from the industry on the floor price issue, a report by ICICI Securities has said that any huge tariff hike is unlikely for at least a quarter or two.

"Tariff hike is unlikely before recommendation on floor price, as any suo moto tariff hike may work against telecom operators for policy intervention. We do not see any huge tariff hike for at least a quarter or two," ICICI Securities said in a recent report.