TRAI requests further information on recent tariff increases

26 Sep 2011

The Telecom Regulatory Authority of India (TRAI) has called for further information from mobile network operators including Bharti Airtel and Vodafone Essar regarding recent tariff increases, the Economic Times reports. It is understood that, with the regulator dissatisfied with initial feedback from cellcos on why prices have been hiked by up to 20%, it has requested further information from operators on the increases. ‘TRAI has received replies from various operators and we have asked for some more input from some of the service providers for their reasons to hike tariffs,’ a source at the regulator was quoted as saying. Some cellcos have have pointed to inflationary pressures as the main reason for their actions. Having 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, Airtel stated: ‘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 rollout aspirations leave us with little choice but to make some price corrections.’

As previously reported by CommsUpdate, at the end of last month the TRAI called for clarification from mobile operators on the decision to increase call charges, with its chairman JS Sarma at that time noting: ‘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.’