The Hindu Business Line : TRAI meeting mobile operators on tariff hike

Core of issue
Bharti, Vodafone hiked local rates and SMS charges
Forbearance allows operators to fix their own tariff without any regulatory intervention
TRAI will use a soft touch approach to convince the operators

Thomas K. Thomas

New Delhi, Aug 16

The Telecom Regulatory Authority of India has called all mobile operators for an urgent meeting on Friday to discuss the recent tariff hike by Bharti Airtel and Vodafone Essar.

Though TRAI has ruled out any regulatory action against the operators, the meeting has been called to express the regulator’s concern at the increase in tariffs and explore the possibility of a roll back.

Forbearance

TRAI has taken a position that since tariffs are under forbearance, it is not going to intervene directly at this juncture. Forbearance allows operators to fix their own tariff without any regulatory intervention. TRAI officials said that despite the forbearance it will use a soft touch approach to convince the operators to withdraw the increase.

“The hike is anti-consumer but since tariffs are under forbearance, we are not taking any direct action against the operators. We have the option of withdrawing the forbearance provision but this is too small an issue to take such a major decision,” Mr Nripendra Misra told Business Line.

Bharti and Vodafone had increased the local rates from Re 1 per minute to Rs 1.20 per minute for all pre-paid and post-paid users with lower rentals. They also increased the SMS charges from Re 1 to Rs 1.20.

Mr Misra added that TRAI has told the operators that the benefits of reduced access deficit charge was not being passed on to the consumers.

Consumer groups, however, have asked TRAI to intervene and press the operators for rollback.

Consumers’ reaction

“It is our view that forbearance of tariff cannot come in the way of TRAI to discharge its functions of protecting consumers’ interest. We will wait for TRAI’s action till August 22, failing which, we will take recourse to legal action to protect consumers’ interest,” said Telecom Watchdog - a consumer group, which had earlier filed a PIL against Vodafone picking up stake in Hutch.

Tariff rollback

But the operators are in no mood to roll back the tariffs. Industry sources said that they would explain their position to TRAI at tomorrow’s meeting.

Consumer groups have accused the operators of forming a cartel as the two mobile firms had announced the tariff cut jointly.

“The hike has hit the consumers at the bottom of the pyramid, while the premium customers continue to enjoy tariff which is as low as Rs 0.30 per minute of local call. The “joint” action by the two dominating powers in GSM market is nothing but an evidence of cartelisation. Moreover, the hike was unwarranted in view of declining ADC and sharp rise in their profitability,” said the Telecom Watchdog.