India’s three major mobile players pushed the Telecom Regulatory Authority of India (TRAI) to set a price floor, insisting the move is necessary for tariffs to return to sustainable levels and ensure long-term profitability, as they face a jump in levies due to a broader definition of adjusted gross revenue (AGR), The Economic Times reported.
In a letter to TRAI, the Cellular Operators Association of India (COAI) said: “Given the financial pressure on the sector and the fact that ARPU and tariffs of the Indian telecom sector are the lowest in the world, floor pricing is imperative to ensure that the sector is sustainable, and is in a position to bear the deferred spectrum and AGR dues,” the newspaper wrote.
COAI director general Rajan Mathews told ET the letter to the TRAI chairman seeks a quick resolution of the floor price issue to ensure this “critical avenue is not put at risk at this critical juncture”.
After COAI, which represents Reliance Jio, Vodafone Idea and Bharti Airtel, first asked TRAI to set a floor price in early December 2019, the regulator initiated a public consultation to explore tariff revisions, seeking views on setting a price floor for voice and data, which would be the first move by the government to impose a minimum price in any industry.
In early March, the Competition Commission of India and the Policy Commission dismissed operators’ call for minimum pricing, arguing it would likely reduce competition and effectively guarantee a minimum level of profit for operators.