Telecom Lead India: Major mobile service providers in India
have opposed TRAI’s proposal to review the wireless tariff policy. They feel
that the current regulatory regime is enough to protect the interest of the
mobile user.
There is no need to revisit the policy at this point in
time and the policy of tariff forbearance should be allowed,” said Rajan S
Mathews, director general of Cellular Operators Association of India (COAI) in
his comments to TRAI.
COAI said presently the profitability and sustainability of
the telecom industry is at stake due to high regulatory costs such as very high
spectrum prices, cost of implementing security measures, MNP, huge penalties
arising under modification of contract terms and unreasonable expectations of
the Government from the Operators.
COAI said Indian operators had to pay for 3G spectrum in the
country; intense and grueling price wars and the fact that the return on the
investments has not been adequate till date. Further, the operators are finding it difficult to attract funds from the
FIIs and Banks that are shying away from the industry due to policy instability and uncertainty.
According to COAI, the rate of decline in ARPU has been the
highest in India. As per Merrill Lynch Global wireless matrix, the year on year
(YoY) % change in ARPU by country as of 3Q11 was one of the highest in the case
of India at 9.5 percent. Policy of forbearance has given further impetus to
pure play of market forces which has resulted in mobile subscribers benefiting
from significant drop in tariffs.
It would be unfair to implement forbearance on a
conditional basis i.e. forbearance only if tariffs reduce and regulatory
intervention when they increase,” said SC Khanna, secretary general,
AUSPI.
According to AUSPI, TRAI’s progressive policies of
forbearance have nurtured the growth of the industry and have allowed the
tariffs to come down to amongst the lowest in the world thus making the Indian
telecom industry to become the 2nd largest in the world.
AUSPI holds a view that present regulatory regime of
forbearance is working perfectly well, as it is evident from the various plans
introduced in the ever growing telecom sector in our country which is offering
one of the most affordable tariff in the world.
The existing tariff regulatory frame work is almost 13 years
old and has been instrumental in ushering healthy competition. This sector has
many innovative tariff plan e.g. 1 paisa per second voice calls which is
extremely affordable.
With enough competitive force prevalent in a service area
with almost 11-12 operators, forbearance is working extremely well. Forbearance
was introduced when there were 2 -4 operators in a service area.
