New Delhi: After a severe hit on account of AGR, relief may be underway for telecom companies with the government exploring minimum price for calls and data to prevent extreme low or free tariffs.
Free or very low voice and data tariffs are seen as the root cause of the current losses of the operators and are among the other reasons like high licence levies and spectrum prices.
This floor price move if finalised will benefit incumbents like Vodafone Idea and Bharti Airtel who reported a combined loss of Rs 74,000 crore for the second quarter ended September 30, 2019.
The committee of secretaries (CoS) currently looking into sectoral levies is exploring setting a minimum price for mobile calls and data as per officials. The CoS has sought committee has sought recommendations from Department of Telecom (DoT) on setting a minimum charge for all tariffs for telecom players on both voice and data and also assessing the impact it will have on telecom operators.
Sector regulator Trai had earlier rejected the idea after holding discussions with telcos. The Supreme Court has asked telecom companies to pay Rs 92,000 crore to the government as Adjusted Gross Revenue (AGR). The department will soon begin consultations for the floor price on voice and tariffs and also may seek Trai suggestions on this and then finalise the recommendations which will be sent to the committee of secretaries.
DoT will seek to review the minimum charge that should be set, the rationale and the financial benefit it will have on telecom operators. The committee has been looking at proposals of licence fee relief to a moratorium on spectrum payment.