Telco Group, Telecom News, ET Telecom

NEW DELHI: A floor price must be set for at least mobile internet services in order to provide telecom operators relief from the colossal burden of costs, a telecoms lobby group has said.

“Ground prices need to be set to alleviate the immense cost burden. They should only be set for data for an interim period, say 2 years, and voice calls / tariffs can be excluded, ”SP Kochhar, Managing Director. The Association of Cellular Operators of India (COAI) said in a statement.

COAI, based in Delhi, represents Jio, Airtel and Vodafone Idea.

“Over the past few years, floor pricing has become a critical issue and is now a necessity as the telecommunications industry is going through major financial strains,” Kochhar said, adding that despite these financial constraints, during the pandemic, the telecommunications service providers continued to make significant investments and provide seamless network connectivity to Indians.

The establishment of a floor price is one of the contentious issues that pitted telecom operators against the sector regulator.

In 2019, the Telecom Regulatory Authority of India (Trai) rejected the group’s proposal to set a floor price for data, aimed at avoiding a sharp drop in average revenue per user following Jio’s disruptive incursion in September 2016.

“It is important to understand that telecommunications operators have suffered losses due to the downward trend in data tariffs,” he said.

Income generation, according to the telecommunications group, has become essential to maintaining financial health.

Following the closures induced by Covid in March 2020, the regulator again rejected the industry’s request to hold virtually open house discussions.

Vodafone Idea Chairman and industrialist Kumar Mangalam Birla, in a letter to Cabinet Secretary Rajiv Guba on June 7, said investors are unwilling to invest in the company in the absence of clarity on AGR (statutory dues) responsibility, an adequate moratorium on spectrum payments and “most importantly is a floor price regime above the cost of the service”. Last month, Bharti Airtel chairman Sunil Mittal said “telecommunications tariffs must go up” and the company would not hesitate in this regard, but added that it could not be done unilaterally.

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