COAI hails TRAI's consultation papers on floor pricing, brings relief to debt-ridden firms

Amid the growing tensions in the telecom industry, the Cellular Operators Association of India (COAI) on Tuesday, December 17 welcomed the consultation paper issued by telecom regulator TRAI on floor pricing. 

In an effort to bring relief to debt-ridden companies like Airtel and Vodafone Idea, TRAI  deferred by one year the scrapping of the charge paid by mobile phone users for calls made to other networks and initiated talks to prescribe minimum or floor price for call and data, effectively ending free call regime.

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"COAI welcomes the Consultation Paper issued by the telecom regulator on floor pricing. In our previous submission to TRAI, we have highlighted that tariff correction is necessary for improving the financial health of the industry," said Rajan S Mathews, DG, COAI in a statement.

Stressing that the only option available is for the Regulator to intervene and correct the anomalous pricing situation prevailing in the market place.

 Mathews said, "We believe that Regulation on this issue by the Regulator will ensure that the Telecom industry remains healthy and robust, there is orderly competition and above all, the resources are available with TSP's to enhance QoS and expansion of networks to achieve the vision of Digital India."

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"Such a Regulation will also provide predictability to both domestic and foreign investors which will ensure the needed resources to the industry will remain available," he added.

In a statement earlier, TRAI said, "The authority has decided to float a consultation paper on the issue so that all the stakeholders in the value chain can get an opportunity to fully participate in the deliberations and give their views on such crucial issues affecting consumer interests.

Considering this aspect, a consultative paper on "Tariff Issue of Telecom Services" has been issued to invite comments from all stakeholders, on various issues relating to the tariff in the telecom sector."

 TRAI also announced that telecom operators will continue to pay 6 paise per minute for every outgoing call made to their competitors' network till December 31, 2020. These charges are proposed to become zero from January 1, 2021.

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Telecom industry body COAI sees it as a relief for the debt-ridden sector and asserts that continuing with six paise mobile call termination charges will not have any impact on consumers as operators have already absorbed this charge in their recently increased mobile call and data rates.

"For wireless to wireless domestic calls, termination charge would continue to remain as Re 0.06 (paise six only) per minute up to December 31, 2020," Trai said.

Within hours of the IUC announcement, TRAI released a consultation paper to fix minimum or floor rates for mobile phone calls and data, a move that will effectively end the regime of free calling and dirt cheap data.

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