Telecom operators have urged Trai to fasten up the process of fixing floor price as it will revive the telecom sector from financial burden and attract investments in future. Telecom operators are already under huge burden due to the AGR crisis and lockdown period. Due to multiple reasons, the ARPU of the telecom operators has taken a hit. As reported by ET Telecom, Cellular Operators Association of India (COAI) has also sought an open house regarding the matter as soon as possible. Nearly all the major telcos like Bharti Airtel, Vodafone Idea, Reliance Jio and others have been asking Trai to fix floor prices soon and drag them out from difficult situations.
ARPU of Telecom Operators Have Decreased
Telecom operators have been facing constant financial pressure. The primary reason behind the financial distress is the AGR dues. Supreme Court of India directed all the telcos to clear AGR dues as per the estimates calculated by DoT. Apart from this, the outbreak of Covid-19 further disrupted the telecom industry. In order to fight back the deadly virus, the government announced the lockdown period, which hampered the normal operations of the telecom operators. Due to all these reasons, the average ARPU of telecom operators has declined. To ensure that ARPU gets back in the same position and the sector becomes sustainable, COAI has requested Trai to fix a uniform floor price soon and aid the telecom industry to invest in world-class networks and services.
Floor Price will Improve ARPU
As stated by the sector analysts, a fixed floor price will improve the ARPU of the telcos, which has been declined to various reasons. Not only this, but the uniform floor price will also maximise the revenue of telcos in mobile service and reduce the risk of price competition in the market. COAI has also urged Trai to fix the floor price for an interim period of two or three years after which the regulator may review the tariff regime. Also, COAI expects that fixed floor prices will help the telcos to face healthy competition in the market without any trouble. COAI has earlier marked that fixed floor price structure must have a connectivity or subscription charge. However, the ideal floor price is still on the hands of Trai.