TRAI says commission’s concern with government revenue ‘inconsistent’ with policy objectives

31 Mar 2017

Sector watchdog the Telecom Regulatory Authority of India (TRAI) has dismissed accusations from the Telecom Commission – the telecom ministry’s highest decision-making body – that decreasing government earnings from the industry are due to the TRAI’s failure to enforce regulations, the Economic Times writes. The TRAI pointed out in its written response that the commission’s perspective that decreasing government turnover equated to the sector being in poor health was ‘inconsistent’ with policy objectives. As previously reported by TeleGeography’s CommsUpdate, the TRAI was criticised last month for not following its own directions regarding promotional offers, referring to newcomer Reliance Jio Infocomm’s (Jio’s) Welcome and Happy New Year offers, which sparked a tariff war. The ministry suggested that the TRAI had not enforced rules stating that a promotion cannot run for more than 90 days, and blamed the oversight for falling government earnings from the space. Backing up its stance, however, the TRAI reminded the commission that it had sought the opinion from the Attorney General before making a decision on the matter.

The TRAI wrote that: ‘The telecom commission’s letter is premised on the contention that reduced tariffs is leading to reduced revenue for the government and poor financial health of the sector which may harm the interest of the sector and the financial institutions.’ The regulator went on to note that the commission’s position ‘overlooked’ key elements of the National Telecom Policy 2012 (NTP 2012), such as increasing penetration of telecom services, particularly in rural areas – an objective which is greatly aided by tariff reductions. Instead, the TRAI accused the commission of giving ‘centre stage’ to the maximisation of government revenue, ‘which is not one of the objectives of NTP.’