Setting floor price for telecom tariffs to be good for sector: DUG to Trai

A public policy think tank for digital users in India has said setting a floor price for telecom tariffs is a good option to improve the health of the sector so that the operators provide quality service to consumers and invest in network expansion.

The Digital Users Group (DUG) said the current form of market forces are not conducive to telecom operators to recover costs from tariffs, and customers may get benefits in the short term but ultimately quality of service (QoS) and connectivity can only be ensured if the sector is sustainable.

“Thus, floor price is an important requisite for consumers, the sector and the country as revenue increase seems to be the only recourse left for telcos to offer services with proper QoS parameters being followed,” DUG said in a letter to Telecom Regulatory Authority of India (Trai) chairman PD Vaghela.

The DUG further said price structure must be fair for all consumers. Those consumers using premium network elements may be charged more accordingly. “Trai should look at a combination of fixed fee and usage charge for floor price,” it added.

Over the years, many telecom operators have either exited or merged with other larger entities, thus limiting the scope of healthy competition in the sector. Any further exits will be counter-productive for the sector as well as consumers because it will lead to monopoly/duopoly, DUG pointed out.

Trai came out with a consultation paper last year on setting floor price for telecom tariffs. Most of the stakeholders have submitted their written comments on the matter but no open-house discussion has taken place yet.