Industry body Cellular operators association of India addressed Trai (Telecom Regulatory Authority of India) and marked that floor prices must be applied to different types of subscribers and for all type of plan offerings. The association also noted that floor tariff is significant for data services. However, a floor price for voice calls and voice tariffs should remain under forbearance. Despite the recent hike in tariffs, fixing a floor price will guarantee minimum revenue for telecom operators which will ensure their viability in the market and overall growth of the telecom industry. COAI added that fixed floor price must be applied uniformly to all different subscribers and for all type of tariffs plans.
Floor Price Structure Might Have Connectivity Charge
As mentioned in the latest submission by COAI to Trai on Tariff issues on telecom services “There is a proper need to fix the floor price for cellular data services. Also, fixed floor price structure must have a connectivity charge or subscription irrespective of use even for voice.” However, COAI has not decided on the ideal floor price, which would revive the sector. Instead, the burden has been shifted on operators to present their calculations and suggestions. In order to fix the viable floor price, Trai has to intervene with the regulation of prices, citing the existing challenging circumstances.
Floor Price will Regulate the Market
COAI marked that whenever the industry has faced excess financial distress and competition, floor price has always regulated the market. It is quite evident that telecom industry is currently facing massive distress because of cash crunch and massive financial debt on telco giants. In such a scenario, COAI member operators are fully committed towards meeting the futuristic goals of the telecom industry set up by the government. However, COAI will need substantial investment for fibre backbone, technology to offer quality services. Fixation of floor price will show a positive impact on the distressed telecom industry as it would help the telcos recover their cost, remove financial liability and face competition in the market without any trouble. Also, floor prices will attract huge investments in the telecom industry. COAI addressed Trai and noted that floor prices must be fixed for an interim period of two or three years after which the regulator may review the tariff regime.