Trai Floor Pricing: Telcos Suggest per GB Price of Rs 35

Vodafone Idea and Bharti Airtel Suggested that floor price must be set at Rs 35 and Rs 30 per GB whereas Reliance Jio marked that floor price must be placed at Rs 20 per GB

By March 14th, 2020 AT 3:56 PM
Highlights
  • Reliance Jio said the Trai should not follow cost recovery and reasonable return approach
  • Vodafone Idea suggested that floor prices must be set up at Rs 35 per GB
  • Uniform Floor price will increase the ARPU

Trai’s consultation paper ‘Tariff Issue of Telecom Services’ and its floor tariff regime might serve as financial aid for the telecom sector as the industry is facing a cash-crunch situation because of the massive AGR dues. Telcos such as Bharti Airtel, Vodafone Idea and Reliance Jio earlier appealed Trai to set up a floor tariff. Not only this, government officials reached to Trai and asked them to fasten up the process and decide a uniform floor price which would revive the telecom industry from financial burden. The views of Bharti Airtel, Vodafone Idea and Reliance Jio almost stick together regarding the floor tariff price as the telcos have demanded that floor price must be set at Rs 30, Rs 35 and Rs 20 per GB respectively.

Bharti Airtel and Vodafone Idea Suggest Higher Floor Tariff

Bharti Airtel and Vodafone Idea have asked Trai to set up floor tariff at Rs 30 and Rs 35 per GB as it will revive the telco giants and ensure their viability in the market. However, the numbers suggested by the telcos are more detailed. Whereas, Reliance Jio suggested that floor price must be set at Rs 20 per GB, which will sustain the investments in the telecom industry.

Reliance Jio also marked that the floor tariffs must not be based on the cost recovery and reasonable return approach, whereas Bharti Airtel and Vodafone Idea strongly supports the method. Also, Reliance Jio suggested that mobile termination rates must be set up at Rs 0.06 per minute. Whereas, Bharti Airtel and Vodafone Idea suggested a floor price for an unlimited voice call.

Will Floor Price Regulate the Market?

As of the current scenario of the telecom industry, telcos have been facing trouble because of AGR dues. All the telcos have to pay a cumulative amount of Rs 1.47 lakh crore to DoT towards AGR dues. Vodafone Idea which is the most troubled telco has to pay a whopping amount of Rs 53,000 crore out of which the telco giant has just paid Rs 3,500 crore. In such a situation, a uniform floor price will help the telcos to gain their Average revenue per user (ARPU) and survive the financial distress. Not only this, but the floor price will also benefit the telcos to provide better service to their customers.

A Happy Geek and a Network Research Engineer with a really cool day job…

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