Amid allegations by telcos that low and cheap tariffs offered by one operator were forcing them lower mobile call and data rates causing profits erosion, the telecom regulator has indicated it was unlikely to revisit the tariff forbearance issue.
“The telecom regulator has kept tariffs under forbearance. We feel competition is taking care of tariffs. We don’t see achievement of any objective by interfering with tariffs,” TRAI chairman R S Sharma told Financial Chronicle.
Some telcos during a discussion a year ago had mooted fixing a floor price for telecom tariffs by TRAI, said Sharma. By the end of the meeting they found it to be a bad idea, he added. “We do not interfere in marketing strategies of telcos. Our overarching principle is transparency, non-predatory and non-discriminatory,” the Trai chairman said.
For the past several months, Reliance Jio has topped the subscriber additions table. Jio will continue to offer aggressive tariffs, say experts and broking houses.
The market leader’s top line and bottom line took a serious hit with the entry of Jio in the sector in September 2016 as it offered lower tariffs on voice and data segments.
Jio, backed by billionaire businessman Mukesh Ambani, entered the telecom services with offers like lifetime free voice calls and rock-bottom data prices. It not only attracted new clients but also subscribers to other services.
The other attractions of Jio were all 4G network, which ensured high speed and better downloads. Existing telcos offered 4G services coupled with 3G in most of India.
In two years, Jio has won 22.7 crore subscribers, which places it fourth in the user list. Airtel tops the list with 34.5 crore mobile subscribers. But Vodafone Idea, the created after merger entity of Vodafone and Idea would change the scenario as it would have 44.4 crore (22.4 crore Vodafone and 22 crore Idea) subscribers.
According to Trai data, Jio held 19.62 per cent subscriber share of the 116 crore wireless market, against Vodafone’s 19.30 per cent and Idea’s 19.07 per cent. But Jio is still behind Sunil Mittal promoted Bharti Airtel’s 29.81 per cent.
Sharma said there are 25 plans per operator in each of the 22 telecom service areas (LSAs). India’s mobile market is over 95 per cent pre-paid, which is highly competitive segment.
Airtel has posted heavy losses on India business in the first quarter of FY19 on pricing pressure and low global termination charges.
Its India business posted a loss, before exceptional items, of Rs 940.4 crore, compared with a profit of Rs 834.9 crore a year earlier. Idea has witnessed losses widening and Vodafone revenues are also down. – Financial Chronicle