Relief for Jio as TRAI Says No Floor Price Necessary as of Now

Relief for Jio as TRAI Says No Floor Price Necessary as of Now
Highlights
  • TRAI said that fixing the floor price "is not a workable idea"
  • Minimum floor price would mean an end to freebies in the market
  • Collectively decided not to forego the principle of forbearance

Telecom regulator TRAI on Friday said the industry has reached a consensus that there is no need for a floor price for telecom services as of now.

Telecom Regulatory Authority of India Chairman R S Sharma said he met representatives of all service providers on Friday and arrived at a consensus that fixing the floor price "is not a workable idea".

"The consensus is that as of now, we don't need to pursue the idea of a floor price. We had detailed discussions for over two hours today. There will be no further discussion or consultation on the issue," he added.

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TRAI met operators after a section of incumbent telecom companies demanded fixation of a minimum floor price for data and voice calls.

If a minimum floor price had been set, it could have meant an end to freebies in the market. The tariffs are currently under forbearance - operators virtually have a free hand in fixing the rates and report tariff plans to TRAI in 7 days of launch - and, hence, a floor price setting would have implied a shift from that regime.

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"Consensus at the end of the meeting was that there is no need to pursue the idea and it has been collectively decided not to forego the principle of forbearance," Sharma said.

During the meeting, Idea Cellular is learnt to have batted for fixation of a minimum floor price through a one- hour presentation, while newcomer Reliance Jio termed the proposal as a regressive and anti-competitive step.

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