One of the major impetus from the government on the regulatory front for the telecom industry was supposed to be the floor pricing regime. However, as per the latest reports, even the last ray of hope for some of the telecom companies might be slipping away. As per the latest reports on the matter, the Telecom Regulatory Authority of India (TRAI) might not be working on any floor pricing regime. It’s worth noting that a floor pricing plan from the regulator would have helped the telecom companies like Bharti Airtel and Vodafone Idea in pushing their plan prices upwards and saving the Average Revenue Per User (ARPU) from falling further on.
TRAI Not Working Towards Floor Pricing
The report comes from ET Telecom; in an anonymous way, a TRAI official has revealed that the regulator is not working on any floor pricing because it will be against consumers’ interests. The Cellular Operators Association of India (COAI), which is a high-level body representing the top telecom operators in India, had written to TRAI about bringing a floor pricing method. As per their reasoning, the competition in the industry was not allowing the players to increase tariffs of their plans. Reliance Jio took an opposite stance on this and said that the proposal by Vodafone Idea and Bharti Airtel is regressive and does not help the industry in growing.
Indian Data Prices Too Low
As per the global standards, the data is priced very cheaply in India at around Rs 8 per GB. The rates had fallen drastically since the foray of Reliance Jio in the country after it started offering free data to the users. Currently, after the launch of new plans by the telcos, the same has to be informed to TRAI within seven days. However, TRAI has said that pricing in the telecom industry will remain under forbearance. While Reliance Jio has posted impressive profits and growth on its financial metrics, other telecom companies like Vodafone Idea are under reeling losses. The ARPU, which is the most sought-after metric in the industry, has taken a deep hit after Reliance Jio’s entry. Bharti Airtel seeks a floor pricing regime for maintaining a healthy ARPU as well.
