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Andrew Bonwick
Vice President of Product Development at Relm Insurance
Madhav Sheth
CEO of Ai+ Smartphone
Stephen Rose
CEO Render Networks
The Telecom Regulatory Authority of India (TRAI) has been on the task of managing and regulating an industry that has been under a lot of pressure. The telecom industry in India has not only been suffering financially but also from other troubles like the quality of service norms, poor networks, telecom marketers, and many. Over the years, TRAI has brought out consultation papers and regulations in the industry to tighten the norms for the industry players and to make the lives of the consumers easier. The regulator also intervened in the affairs of the DTH industry by bringing in the National Tariff Order, but now it seems that TRAI is shying away from altering the pricing regime on the Indian telecom industry.
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The Need for Price Hike
The private telecom operators, Vodafone Idea, Bharti Airtel, have been in dire need of a price hike. Both the telcos are on the list of companies that have to pay massive Adjusted Gross Revenue (AGR) dues to the central government. In addition to this, they have to pay for the renewal of the spectrum in a few years along with the dues for the spectrum, which they bought in March this year. On the contrary, Reliance Jio being a new entrant in the telecom industry, has been an exception to the AGR dues demanded in high quantum by the courts. The Mukesh Ambani-led telecom company also finds itself basking in good financials, unlike Vodafone Idea.
In such an industry structure, a floor pricing regime would have helped the companies in uniformly raising tariffs across the band and to get their finances in order. Such a move would have also helped the companies in lifting up their Average Revenue Per User (ARPU). A metric that remains very low despite India being the biggest user of data across the world. The global prices of data in India also remain super low at Rs 8 per GB. The worst of all, Vodafone Idea, which now stands at a staggering financial risk, would also likely be saved if TRAI were to bring a floor pricing regime and help the telco in raising tariffs.
