“The consensus is that as of now, we don’t need to pursue the idea of a floor price. We had detailed discussions for over two hours today (Friday). There will be no further discussion or consultation on the issue,” Sharma added.
However, sources said during the meeting the incumbent operators pressed their demand to have tariffs compliant with interconnect usage charges (IUC), so that nobody could do predatory pricing.
The current IUC stands at 14 paise per minute and Trai will soon announce a framework on IUC.
Sources further added that Idea Cellular gave a one-hour-long presentation during the meeting in support of its demand for a floor price, but in the end, all agreed that there was no need for it.
The demand for floor prices was raised by some telcos last month, when Sharma met them for a discussion on the ongoing financial crisis in the industry.
Reliance Jio’s entry in September 2016, with its free services and low tariffs, added to the stress of the telecom
operators. The debt in the telecom
industry is estimated at Rs 4.5 lakh crore, and companies
are facing profit erosion.
Currently, telecom tariffs are under forbearance — a practice which has been in place for the past 14 years — and there is no upper or lower ceiling. Trai has fixed a ceiling for tariffs during roaming.
Some telcos had raised the issue of operators offering below-cost tariffs to consumers, arguing it could hurt the financials of the industry. The incumbents, including Bharti Airtel and Vodafone, have maintained that Reliance Jio is offering “predatory pricing” by offering free calls for months.