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Telcos’ tariff details under TRAI scanner
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The telecom regulatory authority of India (TRAI) has sought tariff details from all telcos to examine if operators are engaging in ‘predatory pricing’ and may also issue a consultation paper on this issue, its chairman JS Sarma said.

The TRAI move comes after market leader Bharti Airtel in December had urged the telecom regulator to look into the business models of some rival telcos that offer rock-bottom tariffs to woo customers. Analysts said that the Bharti Airtel complaint showed a display of nervousness from Bharti over the ongoing tariff war in the telecom space, which has sent revenues and profits of all operators crashing.

“We have asked operators for their plans (tariff) if necessary we will come up with a consultation paper on this. There is no fixed timeline for this. Some operators have already given their plans,” TRAI chairman Mr Sarma said.

He also added that the regulator had not decided if it should intervene in telecom tariffs. Currently, telecom tariffs are under forbearance, implying that they are left to market forces.

Recently, the Association of Unified Service Providers of India (AUSPI), the body representing CDMA players and dual licence holders such as Reliance Communications and Tata Teleservices, had slammed Bharti over the latter’s move to seek TRAI intervention in the tariff front.

“We see instances of predatory pricing where large incumbent operators offer highly subsidised on-network (within the operators’ own network) calling rates. A similar proposition by smaller players is not as attractive due to their limited subscriber base,” AUSPI said. The industry association also added that Airtel offers a 17% discount on calls to its own network (50p/m vs 60p/m), and a 25% discount on on-net outgoing roaming calls (60p/m vs. 80p/m). “This behaviour is tantamount to predatory pricing, as it uses the lure of a large existing subscriber base to drive away the smaller players,” it added.

DoT official had earlier told ET that the government welcomed all initiatives by operators to lower tariffs. “Telecom minister A Raja wants tariffs to be as low as 10 paise per minute for local calls and 25 paise per minute for STD calls. We believe this is possible in the near future. The consumer must enjoy the benefits of low tariffs,” the DoT official had added.

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