Regulators Argue Against India Price Floor
Indian competition chiefs dismissed operators’ call for minimum pricing on voice and data services, arguing it would deter tariff innovation and effectively guarantee a minimum level of profit for operators, The Economic Times (ET) reported.
The Competition Commission of India (CCI) and the Policy Commission said imposing a price floor would likely reduce competition around cost efficiency, quality and charges, as well as discourage new entrants using disruptive technology.
It addressed its concerns to the Telecom Regulatory Authority of India (TRAI), ET reported.
The competition agencies called for policy reforms to improve the health of the mobile sector, the newspaper said.
Operators raised prices in early December 2019, after fierce price competition since Reliance Jio entered the market in 2016 eroded margins and profitability.
At the time of the price increases, TRAI initiated a public consultation to explore tariff revisions, seeking views on setting a minimum fee for voice and data in what would be the first move by the government to do so in any industry.
The country’s three major mobile players, Reliance Jio; Vodafone Idea; and Bharti Airtel, have pushed TRAI to consider setting a price floor, which they insist is necessary for voice and data fees to return to sustainable levels and ensure their long-term profitability. –Mobile World Live