Telecom Commission’s arguments that reduced tariffs and promo offers are lowering government revenue and hitting financials of the sector are “inconsistent” with public policy objectives, regulator Trai has said. In response to the Commission’s letter of last month, Trai is also learnt to have stated that consumer interest is “critical” to good regulation and cannot be substituted with revenue maximisation.
It is a well known fact that lower tariffs help increase penetration of telecom services in rural and remote areas, Trai has said in its letter to the Commission. Affordable services and consumer interest are some of the key elements of the National Telecom Policy 2012, which “surprisingly appear to have been overlooked and maximisation of Government revenue, which is not one of the objectives of NTP, has been given centre stage by the Telecom Commission in its letter dated February 23, 2017”, it added.
The Telecom Commission had expressed concerns on the “serious impact” of promotional offers on the financial health of the sector and the capability of telcos to meet their contractual commitments, including payment of instalments for spectrum purchased, and repayment of loans.
The war of words between the two bodies comes against the backdrop of telecom tariff wars following the entry of Reliance Jio few months ago, offering free voice and data. Incumbent cellular operators have said that Jio’s freebies have hit the profitability of telecom companies. They have moved telecom tribunal TDSAT against the regulator’s decision to allow Jio to continue with its promo offers.