Government says will not regulate telecom tariffs

Despite demand from a section of telecom players to regulate tariffs as the industry is suffering from a deep financial crisis, the government is in no mood to intervene in this issue.

Tariffs should be between the consumers and service providers. Market forces have to determine the prices of products and not the government, said a top official from the Department of Telecom.

“Though the government is also equally worrying over financial situation in the telecom industry, it is not favouring regulating the tariffs. The government announced mega relief package recently and hoping this will help to industry to come out from crisis,” said the official.

On disruption in the telecom sector, the official said this can’t continue for long. It will end soon and industry players will understand this issue, he said.

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With the Department of Telecom is preparing for the 5G auction, the government hoping more players will enter the sector.

The government is planning to introduce another set of reforms where it is keen on addressing elements of revenue maximisation, the official said.

Industry lobby group Cellular Operators Association of India (COAI) has been pressing for a data services floor price for an interim period of two years to help the industry financially recover.

However, the Telecom Regulatory Authority of India (TRAI) firmly said it is not considering fixing a floor for mobile phone tariffs and would continue to keep pricing under forbearance.

Regulatory officials have been saying that telecom carriers should themselves raise their prices, as they have done in recent weeks.

Even Kumar Mangalam Birla, chairman of Aditya Birla Group (ABG) strongly pitched for a floor price regime among other reforms to bail out the telecom sector from the current crisis.

Mobile data rates in India are the lowest worldwide, which at present stands at around Rs 8/GB a month.

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