Now, BSNL, MTNL want to wage a tariff war and Reliance Jio is fighting to stop it

Now, BSNL, MTNL want to wage a tariff war and Reliance Jio is fighting to stop it

  • Jio, Airtel and Vodafone say that a minimum floor price should be fixed for telecom tariffs.
  • BSNL and MTNL want to be exempted from a possible minimum floor price as their market share is lower than 15%.
  • Jio opposes the idea and says that it will promote inefficiencies and also believes free outgoing calls are a bad idea.

The tables have turned and Mukesh Ambani’s Reliance Jio, the top telecom player in the country, is consolidating its position. As a result, it now wants a minimum floor price and no exceptions.

While Airtel and Vodafone are onboard with this, there are a new set of challengers with nothing to lose and a lot to gain -- BSNL and MTNL. These state owned telecom companies which are hoping to make a comeback after shedding employee weight and government’s capitalisation, want to play the tariff game.

Now, it is Jio which is taking a diametrically opposite view. Reliance Jio has opposed the suggestion of BSNL and MTNL to exempt telecom operators having less than 15 per cent market share from minimum rates for phone calls and data services, according to a PTI.

Exemption from floor prices will promote inefficiencies, says Jio

The telco which started with free data and free calls now wants to oppose free outgoing calls, as long as mobile call termination charges are applicable. Termination call charges are paid by the network on which a call originates to the network where it lands.


"We also oppose the BSNL/MTNL suggestion on exemption from floor when the market share based on VLR subscriber is less than 15 per cent, as the same is totally untenable, (and) would in fact promote inefficiencies and the intended objectives would not be met if the revised tariff regime is not implemented uniformly across all operators," Jio said in its comments to Trai on fixing floor prices.

The Telecom Regulatory Authority of India (Trai) is holding consultations with interested parties over fixing a minimum price for call and data services following demand from the industry.

According to Trai data for December 2019, BSNL has 10.26 per cent and MTNL 0.29 per cent market share in mobile services. MTNL operates in two circles - Mumbai and Delhi while BSNL operates in the rest of the country. Jio leads the market with 32.14 per cent market share.

At present, telecom companies are free to decide on call and data rates but due to stiff competition, they have sought regulatory intervention.

Vodafone Idea wants a minimum data price of ₹35 per GB

Mobile subscribers get access to 4G data at a price as low as ₹3.5 per GB but if the floor price is fixed as demanded by telecom operators, mobile internet prices will rise 5-10 times from the current level.

Debt-ridden Vodafone Idea has proposed that the minimum price of data should be fixed at ₹35 per GB, Bharti Airtel has proposed a minimum price of ₹30 per GB for low data users and Reliance Jio wants it to be hiked gradually to ₹20 per GB.

Vodafone Idea (VIL) in its counter comments reiterated the need for fixing floor price for telecom services.

It said that Trai should choose between "short term tariff corrections that are presently below costs and a long term monopoly".

According to VIL's submission, it will take three years for the company to restore its revenue levels after minimum tariff regime is introduced.

"Trai may also consider what it would be like to have a virtual monopoly and what will be the fall-out on the consumers including connectivity, prices, security, innovation, impact on Government exchequer and unduly high dependency on one or two players for this critical sector which is in nature of an essential service and of critical importance to India's security," VIL said.

(With inputs from PTI)

Mukesh Ambani’s Jio disagrees with Airtel, Vodafone on everything except tariffs and transparency