TRAI amenable to cut in proposed tariff hikes

January 14: In a climbdown from its earlier stand, the Telecom Regulatory Authority of India TRAI seems to be more amenable to reducing...

January 14: In a climbdown from its earlier stand, the Telecom Regulatory Authority of India TRAI seems to be more amenable to reducing the tariff hikes in telephone call rates for local calls as well as the almost 100 per cent hike in telephone rentals proposed by them. The TRAI has also decided to make itself 8220;available8221; for discussions with Members of Parliament, after earlier stating that any discussions with MPs would 8220;politicise8221; the tariff setting procedures.

The TRAI proposals on hiking call tariffs for calls between 150 to 1,000 in a bi-monthly billing cycle from the present Rs 0.80 to Rs 1 to a standard Rs 1.30 per five minute call, had drawn widespread criticism from practically all political parties. The TRAI, in their proposals on tariffs in October, had recommended a rental of Rs 120 per month for rural areas currently Rs 50 per month and Rs 160 to Rs 310 for other areas presently Rs 75 to Rs 190 per month.

The political criticism stemmed from an overriding concern for antagonising the vote bank in the middle class soon after the 8220;onion8221; crisis embarrassed the BJP-led Government a few months ago.

The Standing Committee on Communications headed by veteran parliamentarian Somnath Chatterjee had in fact even suggested that any attempt by the TRAI to raise the tariffs by such huge amounts should even be expunged by an executive order of the Government, as provided for in the TRAI Act of 1997.

While the TRAI, which has already found it very difficult to intervene and decide any matter for which private companies have approached them with the Department of Telecommunications challenging their jurisdiction in the high court. So far, the only major function that the TRAI has is the tariff setting one, and if this is expunged by an executive order, it may virtually wipe out the need for the authority.

In a bid to avoid any direct confrontation on this account with the Government, sources say, TRAI top brass may meet MPs later this month.

While the TRAI has made it clear on several occasions that the tariff proposals set by them will make an attempt to be more cost-based than the currently prevailing skewed structure wherein local call rates have been kept artificially low 8212; for political reasons 8212; and are cross-subsidised by long distance STD/ISD call tariffs. This may be difficult to implement in a single stroke and may have to be phased over two or three hikes over the next three to four years to correct the existing anomalies.