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TRAI chairman defends new phone tariff

By Our Special Correspondent

NEW DELHI FEB. 6. The Telecom Regulatory Authority of India (TRAI) Chairman, M. S. Verma's observations indicated that there was little possibility of the TRAI reviewing its tariff proposals, which essentially made fixed phones dearer and cellular phones a little cheaper.

Addressing the CII telecom summit, he said that while proposing new phone tariffs from April 1, the TRAI had addressed two main concerns relating to sustained availability and affordability of services. In other words, phone companies would become self-sustaining while the new tariffs were within limits of affordability. A free fall in phone rates could become injurious after a certain stage. Companies may become economically unfeasible and "death" of services in near future could take place if rates touched unnaturally low levels.

The regulator, he felt, had the unpleasant job of keeping a close watch over predatory pricing. It also had to ensure that tariffs were aligned with the costs incurred on setting up the network. The incumbent or the BSNL-MTNL duo would not lose market share of more than 10 per cent for the next five years. The new players need to adhere to obligations of creating and offering all facilities promised to customers.

Commenting on the demand raised earlier for a strong, firm-handed and steady regulator, Mr. Verma said it must remain independent while phone companies should focus on self-regulation and respect "the single point regulator". With different agencies issuing licences, monitoring their conditions and a third taking action against defaulters, the need of the hour was for a single point for all these issues.

The BSNL Chairman and Managing Director, Prithipal Singh, put paid to expectations of relief from TRAI's proposals, which are recommendatory in nature and allow companies to charge lower tariffs. He spoke about the "huge challenge" of not only on pricing but of instilling the culture of actually using telecom. Subscribers should stop expecting subsidies and free services from the Government and pay for essential services as most people across the world do, he observed.

Analysts, Rolando Balsinde and Rajat Gupta, compared the Indian telecom sector with global trends. Though a lot has been done much more required to be done. Elaborating on the impediments towards healthy growth, they outlined four major factors — no profits are in sight, concerted efforts are needed to start getting profits, a strong regulator and a stable framework for consolidation is required.

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