The Hindu Business Line : Why not cap telecom tariffs, Govt asks regulator

Line of call
Market highly competitive, will prevent cartelisation, says a GSM operator.
Tariff for leased line circuits, national mobile roaming services still regulated.

Our Bureau

New Delhi, Dec. 3 With mobile operators recently increasing tariffs, the Government has asked the telecom regulator to review the policy of forbearance on telecom tariffs. The Ministry of Communication has asked the Telecom Regulatory Authority of India to consider whether there is a need for fixing a ceiling tariff for mobile, broadband and fixed line telephone services.

As per existing norms, TRAI has allowed market forces to determine telecom tariffs on the grounds that there was enough competition in the sector. Tariff for leased line circuits and national mobile roaming services are, however, still regulated.

However, the telecom regulator itself had earlier pointed out that there could be a cartel among various mobile operators in fixing tariffs. The issue had also been highlighted by consumer groups such as Telecom Watchdog, which filed an appeal in the Telecom Dispute Settlement Appellate Tribunal seeking a review of the forbearance policy.

Some of the smaller operators had also sought DoT’s intervention in this regard after Bharti Airtel and Vodafone Essar jointly announced a similar increase in the tariffs of a few packages. The telecom regulator has so far been resisting a change in tariff regulation policy on the grounds that it would be too drastic a step for minor upward revisions in tariff.

TRAI has pointed out that in most mature telecom markets tariffs are not regulated. GSM-based mobile operators are also against tariff regulation. “It would be a retrograde step if TRAI actually withdraws forbearance as it is an accepted principle to allow market forces to determine tariffs. There are enough operators in the market with highly competitive interests to prevent any cartelisation,” said a GSM operator. Earlier, Mr A. Raja, Minister of Communication, had said that fixing a ceiling on tariff would benefit consumers.