The TRAI has released a consultation paper asking all telecom operators and involve parties on if a floor price should be considered to revive the ailing telecom sector and what the modalities should be if that were to be considered. CNBC TV18 was the first to report the story on November 15.

While the paper is a detailed 49-page document, the key issues and questions raised for discussion in the paper are as follows:

Is there a requirement of regulatory intervention at this stage in tariff fixation to protect the interest of telecom service providers

Is fixing a floor price the answer & detailed reason on why

Is there a need to fix floor price despite the fact that the TSPs have increased their tariff recently

What methodology should be used to fix floor price by the Authority and why?

If a floor price is considered, what should be the mark up over the relevant costs for arriving at a floor price

What parameters should be considered to decide floor price and why

Is there a need to fix floor price for mobile data service; If yes, can such floor price be applied uniformly to different categories of subscribers

What should be the basis and methodology for floor tariff fixation for mobile data service

What should be the representative cost for fixing a floor price for mobile data service

Should fixation of floor price be considered for voice calls also

What should be the methodology used to arrive at a floor price for voice services

Should there be any limit on TSPs to offer free offnet calls

If a floor price is considered, should there be any floor price prescribed for bundled offers, including those having unlimited voice calls and data

If a floor price is considered, should there be a price ceiling also to safeguard consumer interest

What should be the methodology used for fixing a price ceiling for mobile data service, voice services and bundled offers.

Should all the tariff plans be subject to floor price tariff orders

How can it be ensured that all the tariff plans of TSPs comply with the floor tariff orders

Telecos and other stakeholders can submit their written comments by January 17, 2020 and counter-comments by January 31, 2020.

In its press release, TRAI has said, “TRAI has so far observed a policy of forbearance in respect of telecom tariffs for valid reasons. It gives the service providers the freedom and flexibility to design their tariff offerings as per the demands of the market.

It gives free play to the forces of healthy competition and has resulted in an exponential growth in the Indian telecom sector in the past two decades. Most economists also advise against the fixation of price 1 controls as it leads to economic inefficiencies, consumer harm, market distortions and reduced innovation.

However, ensuring the provision of ever-increasing data consumption and a good Quality of Service requires a lot of investment in maintaining and improving telecom infrastructure. Fast pace of technological changes in the sector require huge capital investments."

First Published:Dec 17, 2019 7:40 PM IST