Jan 22, 2000|
Cellular tariffs rationalised on court order
According to newspaper reports, the cellular operators have rationalised their tariff structure in line with the court ruling read out yesterday. The tariff and rental rates for usage of cellular phones have been slashed across the country. The order comes into effect from February.
The rentals are to be reduced to Rs 475 per month across the country while the airtime tariffs have been brought down to Rs 4 and Rs 4.5 per minute in metro and non metro areas respectively. The rentals and tariffs are in line with the recommendations of the Telecom Regulatory Authority (Trai).
The court ruling comes in the midst of a government decision to promulgate an ordinance that gives more powers to the Trai. It is anticipated that as soon as this is done, the Trai will usher in the calling party pays (CPP) regime. The CPP regime has been hanging fire mainly due to the lack of clarity regarding the powers of the Trai pertaining to interconnection charges.
The Indian cellular telephony sector has grown at disappointing rates in previous years. This had created cash flow problems for operators that were already burdened with a fixed license fee. To counter this problem, the Trai, in one of its path breaking recommendations, ushered in a revenue sharing regime that made the licence fee variable, depending on the revenue of the operator.
The reduction in rentals and airtime tariff and the introduction of a CPP regime are sure to stir up demand for cellular services. The operators would be hoping that the growth in volumes (airtime) more than makes up for the decline in rates and rentals.
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