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Telcom companies fume as TRAI tries to fix call rates
The telecom regulator has for the first time in nearly a decade sought to intervene in fixing mobile call rates, inviting the ire of telecom companies. Trai on Monday floated a consultation paper on 'review of policy of forbearance in telecom tariffs', expressing concerns about coordinated call rate hikes. The regulator also declining tariffs, which had been the trend for the industry, was being steadily reversed and cited the hike in post-paid tariffs by some players in January. ET had reported last week that mobile bills for consumers were set to rise 20-30% this year as the country's debt-ridden telcos were set to go in for the second round of tariff hikes to revive revenue growth and cut losses in the fiercely competitive sector. Leading telcos had raised call charges by 20% last July, the first hike after operators slashed tariffs in 2008 to win customers. "The industry is very upset. We are completely devastated by this sudden development - this comes at a time when the industry is reeling. We have the lowest and the most competitive tariffs in the world. Why change a policy that has served the industry so well?" said Rajan S. Mathews, Director General, and Cellular Operators Association of India (COAI), the industry lobby that represents GSM-based operators. Since 2003, all tariffs except those for fixed lines in rural India and national roaming rates, are determined by the market. While Trai has prescribed the upper limit for roaming services, the price wars have forced telcos to slash these tariffs to less than 50% of the rates prescribed by the regulator. COAI has also questioned the timing of the latest consultation process. "The Supreme Court has cancelled licenses - there is so much uncertainty. Operators don't know how much they may have to pay for airwaves. The consultation processes for all of these issues are on. Amidst all this, why examine tariff forbearance - why now?" Mathews said. Justifying the move, Trai chairman JS Sarma in a statement said that 'tariff forbearance has never been and is not a permanent policy followed by Trai'. "Some of the recent developments indicate that there is perhaps a need to review the policy of forbearance in telecom tariffs," he added. Executives with all leading telcos said their respective companies would ask the regulator to continue with the current system and desist from intervening in the market. The regulatory head of a top operator told ET that 'deregulation and market determined tariff has proved to produce maximum benefits for consumers, service providers, and the nation's economy'. Trai has also sought the views of both the industry and consumers on fixing data tariffs
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