India's telecom regulator has reportedly rejected top telcos like Idea Cellular's proposal for the establishment of a floor price for voice and data tariffs in the country. RS Sharma, the chairman of the Telecom Regulatory Authority of India (Trai), said that the regulator decided that fixing a floor price was not a workable idea. "Prices, as they are under forbearance, should continue as they are," Sharma was quoted as saying by media.
Notably, incumbent telcos during their meetings with the regulator and separately with the inter-ministerial group (IMG) had urged the telecom regulator to set a floor price for voice and data services. The demand, upon approval, would have put an end of free services for customers in India. The 4G entrant had been offering free services in India, which triggered an intense price war which had hurt the revenue and profitability of the established carriers.Jio had however opposed the need for the floor price.
In the country, tariffs for telecom services are currently under forbearance and telcos are free to decide on consumer offerings and report plans to the regulator within seven days of launch. Sharma further told media that "there wouldn't be any further discussions on this."
Top telcos wanted a floor price to put an end to the free services which were being offered by new entrant Reliance Jio Infocomm who had triggered an intense price war which had hurt the revenue and profitability of the established carriers. Following the introduction of free services, incumbent telcos were forced to cut the cost of data services bundled with free voice service in the country.
Jio, which gained 100 million users in record time due to free services, faced criticism from incumbents which termed such offers against norms. The regulator however previously cleared Jio’s free voice and data offers and said they don’t violate pricing norms. The matter is currently in the court and the telecom tribunal, the TDSAT.