Broadband subscribers increased 2.79%; Reliance Jio added almost 4 mn subs
Telecom regulator Trai on Thursday said it will study a suggestion of having a mandated floor price for voice and data services. This is because operators would then have to abide by the prescribed “floor” in their tariff offerings.
Sharma of Trai admitted that the concept of a floor price may be contrary to the regulator’s stance of forbearance on tariffs, but said the minimum price issue will have to be “deliberated” on.
India’s largest telcos – Bharti Airtel, Vodafone India and Idea Cellular – have rejected Reliance Jio’s charge that the financial stress in their businesses was due to their dependence on debt, and blamed high government fees as well as the newcomer’s free offers for their woes.
Tariffs are now under forbearance meaning that operators are only required to report their plans to Trai within seven days of launching them.
Telecom tariffs in India are now under forbearance and companies are free to decide on consumer offerings.
Since its launch in September, Jio has managed to sign on more than 100 million subscribers, largely on the strength of its pricing strategy (its services were free till the end of March, and even now, most of its customers do not pay anything for voice calls). The state-owned telecom operator now also has Rs 339 plan that offers 2GB of 4G data daily, besides unlimited voice call within the same network for 28 days. The industry’s debt stands at Rs 4.6 lakh crore. “As a result industry revenue has declined by more than 20 per cent over last three quarters and the return on capital employed is likely to be negative. we have asked for support from the Centre since telecom is key to the Digital India vision”, said one of the operators.
Asserting that the meeting with the operators was productive, he said: “Ultimately, floor price will depend on multiple variants. the technology, utilisation of the network, volumes and many more”.
The report, which also assesses the growth of mobile subscribers across various circles in India, said UP East added the maximum number of subscribers (total 83.54 million) in May 2017.
He was also quick to point out that there were other operators with contrarian views on the issue.
The incumbents also spoke in one voice on reduction of levies like licence fee, spectrum usage charges and GST.
The companies have sought to increase charge for terminating a call on their networks to be increased from the existing 14 paise per minute.
“The workshop is aimed at demonstrating the appropriate cost model to compute the Interconnection Usage Charges or IUC, share worldwide experience and the long-term impact”, Sharma said.
Rivals Bharti Airtel Ltd, Vodafone India Ltd and Idea Cellular Ltd have responded by lowering prices to retain customers but that has dented their revenue.