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DoT to consider floor price for data when COVID-19 situation eases

The Department of Telecom may consider telecom operators’ demand for a minimum price for data tariffs, CNBC-TV18 learns from sources.

For now, telecom operators have been told by the DoT to ensure affordability and quality services at a time when demand for voice and data is quite high.

“Despite lockdown relaxations, work from home is likely to continue for longer, and that means increase demand for voice and data,” said a telecom executive who did not wish to be named.

“DoT’s priority is to ensure customers get affordable and quality services during this period. It has told telecom operators that it is in favour of a floor on data tariffs, but that will be considered only after the COVID-19 situation eases and there is some let up in demand,” the executive said.

A DoT official, who did not want to be quoted, agreed that a floor on tariffs (especially data tariffs) will ease the stress in the sector.

“The importance of the telecom sector has become even clearer during this period and we are listening to the demands of companies. We are in favour of a floor price, but we will not look into it till at least July-August or when the situation eases;” he said. The official confirmed that the DoT will not consider a floor price on voice tariffs, in line with the recommendations of the telecom operators.

Telecom operators along with government bodies like Competition Commission of India (CCI) and Niti Aayog had sent in their recommendations for a floor price on tariffs after TRAI released a consultation paper seeking comments on if there should be a floor price for tariffs, the pros and cons of it and the methodology. CCI was against the implementation of the floor price. While Niti Aayog has first sent a letter against the floor price it sent a revised letter with its final recommendations supporting a floor price.

In the letter Amitabh Kant said; “We would like to strongly emphasise that floor prices are the need of the hour to enable the continuation of a multiplicity of firms that is critical for healthy competition. Given the heavy debt burden being faced by the sector and the recent fall in prices to unsustainable levels, there is no option available but to set floor prices.”

All telecom operators, including Reliance Jio, Bharti Airtel and Vodafone Idea have sought a floor on data tariffs. They felt voice tariffs did not need to have a floor. But government-owned MTNL and BSNL were in favour of a floor on both data and voice services. Sources said telecom operators had discussed the issue with DoT in the last few weeks and open house discussions will continue later.

—CNBC TV18

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