Minimum Regulatory Intervention To Ensure Smooth Operation: COAI

Recently, the telecom regulator released a consultation paper on floor rate for data service of the operators.

Minimum Regulatory Intervention To Ensure Smooth Operation: COAI

Telecom operators increased mobile tariffs by up to 50% to survive

New Delhi:

Industry body COAI or Cellular Operators' Association of India has said that minimum regulation from the telecom regulator will ensure smooth operation of the industry. The telecom regulator should intervene only when there is a breakdown of the market forces, it said. "Telecom regulator must be involved with minimal type of things. Telecom Regulatory Authority of India (TRAI) has taken up floor pricing only because of what happened in the industry," Rajan Mathews, director general, COAI told news agency IANS.

"So keep the regulations at the bare minimum, unless you see a dramatic breakdown in market forces, that is the only time the regulator should intervene," he said.

He said the telecom regulator can introduce new technology, dealing with unwanted commercial calls and customer complains.

When TRAI introduced steps for removing unwanted commercial calls, there was a big cost on the industry as the regulator wanted adoption of block chain and other measures.

"If the market is solving the problem and the operators are working together to solve the issues, then there is to be a particular reason for the regulator to intervene. That's what is a transparent, predictable regulator," Mr Mathews said.

Recently, the telecom regulator released a consultation paper on floor rate for data service of the operators.

The consultation paper of December 17 asks whether there is a case for regulatory intervention to fix a floor price in a market. It seeks views from the industry stakeholders on methodology to compute the floor rate. It even asks whether the regulator also cap the tariff rate in case it fixes floor price.

Recently, telecom operators increased mobile tariffs by up to 50 per cent to survive.

TRAI had floated the consultation paper after the sector and the government asked it to explore a floor price to help telecom companies in getting higher average revenue per users' (ARPUs) and end predatory pricing under the hyper-competition.

The conditions of the telecom companies - like Airtel and Vodafone Idea - further deteriorated after the Supreme Court mandated them to pay about Rs 92,000 crore as pending statutory dues which triggered a minimum floor rate for voice and data.

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