Telecom News

Airtel chief’s remarks on the floor price confirm Trai position official

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Bharti Airtel

NSE 1.33 % chairman Sunil BhartiMittal’s assertions that the industry doesn’t require regulatory intervention to set prices has confirmed the telecom regulator’s view that establishing floor rates wasn’t a viable option according to a senior official.
“We have always been convinced that establishing an unspecified tariff floor could not be practical. It’s a lengthy procedure,” a Telecom Regulatory Authority of India (Trai) official said to ET . The official did not want to reveal his name.

Mittal Thursday stated that a regulatory intervention in fixing an unspecified floor price was not required, which suggests an alteration in the mobile phone company’s earlier position.

Supporting Aditya Birla Group (ABG) chairman Kumar Mangalam Bila’s views regarding the establishment of a floor price, Cellular Operators Association of India (COAI) recently stated that in recent years, fixing the floor price was essential to give the telecom industry with some relief from costs and financial strain. COAI is the umbrella organization for the three private telcos: Airtel, Reliance Jio and Vodafone Idea.

“The cabinet-approved relief plan is more crucial than pursuing a floor price which could only be achieved under a situation where overall telcos’ finances remain in poor shape,” said the official. The telecom tariffs are currently in forbearance.

The official also said that setting the tariff floor is a difficult procedure, it requires a thorough study of the market and a discussion in conjunction with CCI. He also said that the changes that were announced last week are beneficial for a country with a large population such as India because it could bring in new players and encourage competition.