TRAI may ask telecom companies to cut mobile tariffs
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TRAI may ask telecom companies to cut mobile tariffs

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New Delhi: There will be a cut in mobile tariffs, especially in SMS, as the Telecom Regulatory Authority of India (Trai) take actions to push for higher subscriber growth in the country.

The regulator observes cut in mobile tariffs as a major accelerator to boost the subscriber growth, which was falling for the last few months.

Last year, the offer of a pay-per-second plan by a new operator triggered off a price war, leading to charges of predatory pricing by some telecom operators. Earlier, J S Sarma, Chairman, Trai said that the pay-per-second plans could be predatory and that Trai would seek cost data from operators and intervene if necessary. Now, the attack that followed from consumer organizations, parliamentarians and media has led to the Trai backing off, reports Shalini Singh of TOI.

Consumer organizations and media had argued that no operator, especially new entrants, including Tatas and Reliance in their GSM foray, could be accused of practicing predatory pricing. Predatory pricing requires abuse of market power, which is virtually impossible in India since even market leader Bharti Airtel has less than a quarter of the market.

Consumer organizations argued that given the similarity in product offering, the only way for new entrants to capture the market would be to offer price discounts. Further, even if these prices were lower than cost, it could not be considered predatory as service providers did not have the power to practice anti-competitive strategies in a market which has 12 operators and no concentration of market power.

Telecom minister A Raja confirmed in Parliament last week that "at present Trai had no proposal for intervention in the tariffs offered by telecom operators". "As per Trai, operators have submitted that it may be too early to make any realistic assessment of the sustainability of these tariff offers or the actual impact on overall revenues since the tariff plans have been in the market only for a few months," said Raja.

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