India explores minimum prices for telcos

The Telecom Regulatory Authority of India (TRAI) has unveiled a public consultation to decide whether it needs to set minimum prices for data tariffs in the country.

India has been one of the most interesting markets to observe over the last few years, though many of the emerging trends are seemingly having a negative impact on the health of the telecommunications sector. Thanks to disruption, the telco industry does not look very sustainable across the country and there is a very real threat to competition.

“Accordingly, the Authority has decided to float a consultation paper on the issue so that all the stakeholders in the value chain can get an opportunity to fully participate in the deliberations and give their views on such crucial issues affecting consumer interest,” TRAI has said in a statement.

“Considering this aspect, a consultation paper on ‘Tariff Issues of Telecom Services’ has been issued to invite comments from all the stakeholders, on various issues relating to tariff in telecom sector.”

Looking at the price of data, India has some of the lowest tariffs in the world. Although this might sound very attractive to the consumer, various other developments are placing the telcos under financial strain, most notably the spectrum bill being placed on Bharti Airtel and Vodafone Idea.

The Indian landscape is effectively the digital wild-west for the moment, with TRAI taking a very passive role. Reliance Jio’s aggressive pricing plans might have been the catalyst for the drive towards digital, though it should not be allowed to continue on this path. If Reliance Jio is allowed to continue to undermine profits at its rivals in such a destructive manner, the country might head towards a telco monopoly.

This is the first step in the process, though TRAI will have to be proactive and aggressive in its consultation. Vodafone Idea has already floated the threat of withdrawing from the market, and it does appear the spreadsheets will only be able to continue in this manner for a short-period of time. The objective is to make money after all.