Despite the demand from some of the telecom players to regulate prices while the industry is suffering from a deep financial crisis, the government is not in the mood to intervene on this issue.
Tariffs should be established between consumers and service providers. Market forces should determine the prices of products, not the government, said a senior official in the telecoms ministry.
“While the government is also concerned about the financial condition of the telecommunications industry, it does not favor regulation of tariffs. The government recently announced a mega back-up plan and hopes this will help the industry out of the crisis, ”the official said.
Regarding the disruption in the telecommunications sector, the official said it could not last long. It will end soon and industry players will understand this problem, he said.
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As the Telecom Ministry prepares for 5G auctions, the government hopes more players will enter the sector.
The government plans to introduce another round of reforms where it is keen to address elements of revenue maximization, the official said.
The industry lobby group Cellular Operators Association of India (COAI) lobbied for a floor price for data services for an interim period of two years to help the industry recover financially.
However, the Telecommunications Regulatory Authority of India (TRAI) has firmly stated that it does not consider setting a floor for mobile phone tariffs and will continue to keep prices under scrutiny.
Regulators have said telecom operators themselves should increase their prices, as they have done in recent weeks.
Even Kumar Mangalam Birla, chairman of the Aditya Birla Group (ABG) has strongly advocated for a floor price regime among other reforms to lift the telecommunications sector out of the current crisis.
Mobile data rates in India are the lowest in the world, currently standing at around Rs 8 / GB per month.
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