TRAI says existing tariff regime to continue

Regulator TRAI has decided to continue with the existing tariff regime for the time being that allows operators to decide on charges for telecom services.

"TRAI sought views of stakeholders on the need to review the existing regime of tariff forbearance... Taking into account the feedback received from stakeholders, the authority has decided to continue with the existing tariff regime for the time being," TRAI said in its annual report.

The Telecom Regulatory Authority of India (TRAI) had started consultation process in February 2012 to review existing tariff regime which is under forbearance except for rural landline services, national roaming and leased circuits.

Forbearance of tariff for a service means TRAI has not, for the time being, notified any tariff for that particular telecommunication service and the service providers are free to fix tariff for such service.

The consultation paper 'Review of Policy of Forbearance in Telecom Tariff' was floated by TRAI after telecom companies increased call and mobile Internet services rates in 2011.

Telecom experts were of the view that the Supreme Court's cancellation of 122 telecom licences has reduced competition in the market that can lead to increase in telecom tariffs.

In mid 2012, telecom operators openly said multifold high spectrum price recommended by TRAI can lead to increase in telecom tariff by up to 100 per cent.

The telecom regulator had sought comments from sectoral players to review the existing policy and see if it was required to put a ceiling on tariffs.

"Some of the recent developments indicate that there is perhaps a need to review the policy of forbearance in telecom tariffs," TRAI had said in its consultation paper.

In the annual report, TRAI said, "Views were also sought on a suitable tariff framework for data services" and based on the comments received from stakeholder, it decided to continue with existing tariff regime.

Telecom major Airtel and Vodafone had recently raised tariff of their 2G Internet service by up to 30 percent. The consultation paper was opposed by telecom operators.