The Hindu Business Line : Still roaming for ideal tariff

THE TELECOM REGULATORY Authority of India (TRAI) has sought clarification from the country's GSM mobile operators if their new charges for the `roaming' services are in conformity with the overall ceiling on tariff imposed by it. For consumers, however, this exercise may offer only some marginal relief in tariff. This is because there is actually only a status quo or reduction in the overall tariff involving a `roaming' service for all but the tariff plan for `short distance' by one operator. Ironically, the increase, such as it is, could be attributed to the directive from TRAI. Perhaps TRAI has unwittingly drawn attention to the headroom available between the current tariff and the overall ceiling it mandated in early 2002.

In this backdrop, the revised tariffs proposed by the GSM operators appear to be only a cosmetic attempt at assuaging the regulator. This is clear from the way in which the roaming charges were hiked by the key GSM operators with effect from May 1 and recently brought down in unison. Even in February 2004, when the `Revised Interconnect Usage Charges' (the share of revenue to the service providers who carry the call or terminate it at the other end) was brought into force, all the GSM operators had effected a hike in tariffs in unison and defended the same on the grounds that this was only an attempt to pass on the `access deficit' charges imposed on them by the regulator. On that occasion, TRAI had voiced the opinion that there was no justification for the revision in tariffs, but did not intervene, deciding to let competition bring it down.

For the present, the GSM operators stand on a better footing as they claim that even with the roaming tariff hike of Rs 1.50, their overall mobile tariffs fall within the upper ceiling of Rs 3.45 specified by TRAI. The ball now lies in the TRAI court. If it feels that the hike in `roaming' tariff is unjustified it has two options before it. It could examine whether the current ceiling of Rs 3 (excluding 15 per cent surcharge) per call minute needs to be brought down. It may well have a case. After all, infrastructure investments typically have a longer time horizon for recovery of investments. An extension of the time horizon could well justify reduction in the overall ceiling rate.

The second option is to reduce the `Access Deficit Charge' that has been levied as a part of the revised IUC. The ADC has been thrust on the private mobile operators without adequate merit. If current technology allows consumers the benefit of cheaper calls through mobile communication network, it passes understanding why they should be asked to subsidise the more expensive investments of public sector service providers or their high operating costs. Clearly, the levy of the ADC has put the private mobile operators at a competitive disadvantage vis-à-vis BSNL or MTNL in tariff fixation. In addition, this has also served to elevate the overall industry costs, translating into higher tariffs for the consumer.

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