Airtel chief’s comments on floor price validate Trai stance: Official

Bharti Airtel chairman Sunil Bharti Mittal’s comments that the industry does not need regulatory intervention for pricing has validated the telecom regulator’s stance that setting up floor tariffs was not a feasible idea, a senior official said.

"We were always of the opinion that setting up a floor for tariff would not be feasible. This is a cumbersome process," a Telecom Regulatory Authority of India (Trai) official told ET. The official declined to be named.

Mittal Thursday said regulatory intervention on fixing a floor price was not necessary, indicating a change in the mobile phone operator’s previous stance.

Backing Aditya Birla Group (ABG) chairman Kumar Mangalam Birla's views on setting up a floor price, the Cellular Operators Association of India (COAI) recently said that in the last few years, fixing floor price had become critical to provide the telecom industry some relief from cost pressures and financial stress. COAI represents all three private telcos – Airtel, Reliance Jio and Vodafone Idea.

"The Cabinet-approved relief package is more important than seeking a floor price that may only be done in a scenario when the financial health of all telcos remains in bad shape," said the official. Telecom tariffs are currently under forbearance.

The official further said that since fixing a floor for tariffs is a complex process, it requires in-depth analysis of the market situation, and needed a consultation with the CCI. He added that the reforms announced this week would be good for a large country like India as it may attract new players and promote competition.