Operators oppose Trai proposal to review tariff policy

Telecom operators have opposed sectoral regulator Trai's proposal to review the tariff policy, saying the current regime has appropriate regulatory measures to protect the interest of consumers.

In response to Telecom Regulatory Authority of India's (Trai) paper on policy of forbearance in telecom tariff, both GSM and CDMA operators' bodies -- COAI and AUSPI – on Monday contended that under the current structure, mobile phone tariffs in the country are among the lowest in the world.

COAI said change in the policy would not serve any additional purpose since "under the present regime of forbearance, the tariffs have been continuously monitored and customer interest has been protected."

Expressing similar sentiments, AUSPI said that present regulatory regime of forbearance is working perfectly well.

Denying any coordinated move on the part of the industry to increase prices, AUSPI said the hike in tariffs was undertaken by different operators at different points of time.

"The price increase was marginal and not a coordinated activity by the service providers based on some of the factors like rising rate of interests, higher costs of power and fuel, decline in revenue and return on capital employed, higher cost of customer acquisition, higher spectrum usage charges, security compliance, rollout of 3G

services etc," it said.

However, consumer groups like Consumer Voice supported the proposal.

"In view of Supreme Court decision cancelling 122 telecom licenses, the number of operators in each circle has reduced thereby providing undue competitive and resultant pricing power advantage to the incumbent operators," it said.

In this scenario, it is desirable that Policy of Forbearance in Telecom Tariffs is withdrawn till new licences are issued, it added.

Country's largest service provider Bharti Airtel said that one of the key factor responsible for the growth of telecom sector in the country is the policy of forbearance of tariffs adopted by TRAI, where the operators are free to fix their tariff.

"We do not see any need to withdraw the policy of forbearance," Airtel said in its comments. Vodafone, too, said the current policy is most desirable and appropriate for the Indian market.

While supporting the current policy regime, new operator Uninor said Trai also needs to ensure that adequate safeguards are instituted for "effective supervision and prevention of anti-competitive activities by the large incumbent operators."