Date:14/01/2006 URL: http://www.thehindubusinessline.com/2006/01/14/stories/2006011402130400.htm

Back Small telecom operators cry foul
TRAI may review order on differential tariffs

Our Bureau

New Delhi , Jan. 13

THE Telecom Regulatory Authority of India (TRAI) today issued a consultation paper on the issue of differential tariff being offered by various mobile operators.

The move was taken after smaller stand-alone operators approached the telecom regulator demanding a review of TRAI's earlier decision to permit differential tariffs. The stand-alone operators, who offer either only fixed line or cellular, have pointed out that such pricing policy was discriminatory and subscribers of only large integrated operators were benefiting from it.

TRAI has said in the consultation paper that while it had allowed differential tariff in an earlier order, it was still not clear whether or not this policy should be restricted to intra-circle calls only or permitted all across an operator's network.

At present, operators such as Airtel and Reliance offer discounted rates to their subscribers making a call within their own network anywhere in the country. This means a call made by an Airtel user in Delhi to another Airtel user in Tamil Nadu will be cheaper compared to a call between an Airtel user and a Tata Teleservices subscriber. However, a small operator like Spice or HFCL with a single circle operation will not be able to offer such discounted tariffs to its subscribers.

TRAI has pointed out that operators are also following differential tariff between technologies i.e. a call between GSM user and another GSM mobile user is cheaper than a GSM - CDMA call.

"The tariffs offered by the service providers in this space have to be consistent with the principles laid down in this regard which include the principle of non-discrimination, non-predation, IUC compliance. This consultation paper is about the interpretation of the principle of non-discrimination as applicable to tariff for telecommunication services," the paper said.

Recently, a stand-alone service provider had represented that differential pricing was squeezing out small operators. It is also pointed out that if unrestricted differential call charges, particularly on inter-circle level, continue to be allowed, the same may threaten the survival of small operators.