Telcos suggest Floor Price of Data Tariff must be at Rs 35 per GB

TRAI advisory paper 'Tariff Issue of Telecom Services' and its (Telcos) floor data tariff system can act as financial support for the telecom sector as the telecom industry faces a cash-crunch situation due to large scale arrears.

Telecoms like Bharti Airtel, Vodafone Idea and Reliance Jio had earlier appealed to TRAI to establish floor data tariffs. Not only these, but government officials also reached TRAI and asked them to speed up the process and fix the price of a common floor. It would revive the telecom industry from financial burden.

The views of Bharti Airtel, Vodafone Idea and Reliance Jio is almost simultaneous on the floor net tariff, as telcos have demanded that the floor price should be fixed at Rs 30, Rs 35 and Rs 20 per GB respectively.

Bharti Airtel and Vodafone Idea suggest higher floor data tariffs

Bharti Airtel and Vodafone Idea have asked TRAI to set floor data tariffs at Rs 30 and Rs 35 per GB as it will revive telco giants and make sure of their capability in the market.

However, the numbers recommended by telcos are more detailed. Whereas, Reliance Jio recommended that the floor price should be pre-set at Rs 20 per GB, which would maintain investment in the telecom industry.

Reliance Jio has also marked that floor tariffs should not be based on cost recovery and reasonable return approach, while Bharti Airtel and Vodafone Idea strongly support this methodology.

Further, Reliance Jio suggested that the mobile termination rate should be set at Rs 0.06 per minute. But, Bharti Airtel and Vodafone Idea suggested a floor price for unlimited voice calls.

According to the current scenario of the telecom industry, Telcos is facing trouble due to AGR arrears. All telcos will have to pay a cumulative amount of Rs 1.47 lakh crore to DoT for AGR dues.

Vodafone Idea, the most annoying telco, will have to pay Rs 53,000 crore as AGR dues, out of which the telco giant has just paid Rs 3,500 crore.

In such a situation, a similar floor price would help Telcos achieve average revenue per user (ARPU) and avoid financial distress. Not only that, but Telcos will also benefit from floor price to provide better service to their customers.