Mobile phone operators have been facing severe headwinds since Reliance Jio started services
Following a decline in revenue of the telecom sector for two quarters in a row, the Telecom Commission on Wednesday asked the sectoral regulator TRAI to “review” mobile tariff plans offered by telecom operators, including promotional offers.
While the Commission did not name any company, the industry has been facing severe headwinds since the introduction of Reliance Jio, which has been offering free voice and data services to consumers since September last year under two different plans. The Telecom Commission, which is the highest decision making body in the Department of Telecommunications (DoT), has also asked the regulator to ensure proper implementation of its 2002 and 2008 amendments to the Telecom Tariff Orders, 1999. “The inter-ministerial panel today asked TRAI to implement its orders on mobile tariffs and review its existing rules to ensure financial growth of telecom industry,” a source said, adding that this followed a discussion on the decline in revenue for the sector in July-September and October-December and its resultant impact on government earnings.
First revenue decline
The Centre earns revenue from the telecom operators through spectrum usage and license fees among others. “This is the first time revenue of sector has declined.”
At the meeting, the impact on operators’ capacity to meet their commitment towards spectrum charges and instalments amid falling revenues was discussed.
“The Telecom Commission directed the DoT to apprise TRAI of its concerns over alarming decline in revenues and its impact on the overall health of the sector,” the source said.
Reliance Jio, which claims it has added 100 million subscribers in 170 days, on February 21 announced that it will start charging its subscribers from April 1, 2017.
It has rolled out an offer wherein its current subscribers, after paying a one time charge of ₹99, can avail unlimited voice and data services at a monthly charge of ₹303 for a year.
The existing operators had alleged that the promotional offers were in violation of the norms and amounted to ‘predatory pricing’.