Trai rejects telcos proposal on floor price for voice and data services

NEW DELHI: The Telecom Regulatory Authority of India (Trai) has rejected a proposal from some operators such as Idea Cellular that had sought a floor price for voice and data services, dealing a setback to the efforts to stifle Reliance Jio’s free voice offers.

"We had a detailed discussion on this. Fixing a floor price wasn’t a workable idea. Prices as they are under forbearance should continue as they are," Trai chairman RS Sharma told reporters after a meeting on Friday. He said that there wouldn't be any further discussions on this. If a minimum floor price had been set, it could have meant an end to freebies in the market.

Idea wanted a floor price to put an end to the free services which were being offered by new entrant Reliance Jio Infocomm that had triggered an intense price war which had hurt the revenue and profitability of the established carriers. Airtel has maintained that the full cost of incoming services -- reflected in the interconnect charge (IUC) -- be considered the floor price for voice services, but Jio has opposed the need for the floor price.


Trai met operators on Friday after a section of incumbent telcos demanded setting up of a minimum floor price for data and voice calls.

The tariffs are currently under forbearance -- operators virtually have a free hand in fixing the rates and report tariff plans to the Trai in seven days of launch -- and, hence, a floor price setting would have implied a shift from that regime.

Idea made a presentation to Trai on floor pricing, seeking that a floor price be created for voice, data and text messages — which should be equivalent to the industry average cost — to give some immediate relief. The telco also suggested that the IUC component in bundled plans should also be looked into.

Bharti Airtel, on the other hand, opposed a separate floor price, arguing that Trai should set IUC as floor price, below which no one should be able to give voice or data.

Vodafone India also made a presentation and said that if there's a floor price, it should cover the IUC and be a little above that limit, to give some buffer to the industry.

Jio, however, said floor pricing wasn’t necessary, terming the proposal a regressive and anti-competitive step.