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Jio’s new pricing will continues to affect industry, says COAI

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Is the Indian telecom industry ready to move out of Jio’s shadow?
Source: intoday

Cellular operators’ body COAI has said Reliance Jio’s current charges will continue to affect the industry and there is a fair risk of the pricing having an impact on banks and others that are associated to telecom industry.  Jio’s lower pricing for consumers is subjected to a bigger question whether such pricing confirms to tariff mis a matter that needs to be settled by the courts and the telecom tribunal.

Telecom industry owes about  Rs 4.60 lakh crore to various financial institutions and banks. However, Mathews refused to comment specifically on the tariffs announced by Reliance. The Jio deal is not only cheaper, additionally, a ‘complimentary offer’ for three months to those who pay Rs 303 prior to April 15. This means that subscribers recharging before the given date using Jio’s Rs 303 plan (or any higher value plan) will get services for the initial three months on a ‘complimentary basis’, and paid tariff plan will kick-in only in July.

“The industry will continue to bleed under this pricing, and there is the risk of cascading impact on the banks, government (accruals from licence fee and spectrum payments made by telcos), and equipment manufacturers,” COAI director general Rajan Mathews told PTI.

“The consumer will have the benefit of the plans but the larger question of whether it is right or wrong, that is, in compliance with regulations, will have to be decided by the courts,” Mathews said.

Notable rivals such as Airtel and Idea Cellular have moved the telecom tribunal against regulator TRAI for letting the new operator continue the promotional offer beyond the stipulated 90 days. They have also questioned the free offers on the ground that it violates the floor of 14 paise per minute set in the form of call termination charges.

TRAI, however, is of the view that 14 paise cannot be seen as a standard “prescription” for call rates as cellular operators themselves have been offering many plans like unlimited night time calls that breach the so called floor. Applying 14 paise as a rule, therefore, would mean that many of the plans by cellular operators themselves would not pass muster, the official said.

“Although it is the Interconnect Usage Charge, yet 14 paise cannot be a prescription. To make a bland statement, that any call rate cannot be less than 14 paise per minute is not correct,” the official said. TRAI would place its position before the tribunal as directed, the official said referring to the TDSAT’s direction to the regulator to re-examine issues relating to the approval that was granted to Jio on free offers

 

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