TRAI asks cellcos to explain rationale behind recent call charge hikes

26 Aug 2011

The Telecom Regulatory Authority of India (TRAI) has reportedly called for clarification from mobile operators Bharti Airtel, Idea Cellular and Vodafone Essar with regards to the trio’s recent decision to increase call charges on some of their tariffs. According to the Wall Street Journal, with all three cellcos having recently unveiled plans to increase call rates by up to 20% in some circles and for some services, the TRAI chairman JS Sarma noted: ‘We’ll examine what are the reasons they hiked, whether this hike is [justifiable]…whether there is any substance in what the people [companies] are claiming.’ A fourth operator, Reliance Communications, is also expected to be pressed for information on its own recent price hikes.

Inflationary pressure has been cited by a number of the operators involved as one of the main reasons for the rate rise. For its part Bharti Airtel increased the cost of its ‘Advantage’ and ‘Freedom’ pre-paid tariffs, which are based on per minute billing, to INR0.60 (USD0.013) per minute for local and STD mobile-to-mobile calls, up from a previous rate of INR0.50 per minute. Commenting on the issue, India’s Economic Times cited a Bharti Airtel statement as saying: ‘Telecom is probably the only industry where, despite increasing inflation, tariffs have been falling unabated. Continuously declining margins, high 3G and broadband wireless access (BWA) auction prices, constrained spectrum and rural roll-out aspirations leave us with little choice but to make some price corrections.’