Taking a middle path between the interests of consumers and mobile operators, the Telecom Regulatory Authority of India (Trai) on Monday reduced the ceiling for national roaming rates while declining to totally abolish such charges as envisaged in the new National Telecom Policy (NTP) 2012.
The development is significant since unlike in policy matters where the Trai?s powers are recommendatory in nature, in matters of tariffs, under which roaming falls, its say is final.
The regulator said that doing away with national roaming charges altogether is not feasible at this stage and if done, such costs would be passed on by the operators to non-roamers as well in the form of higher tariffs. It has estimated that operators stand to lose R2,500 crore annually if national roaming charges are fully abolished.
?Mandating a fully free roaming regime is simply not practicable at this juncture. Compelling a transition to a fully free national roaming regime would result in telecom service providers not being able to recover their costs from roamers,? the regulator said. ?With increased subscribers and usage, the costs associated with national roaming have declined, but not vanished. There are still real costs incurred in providing the national roaming facility.?
When last year telecom minister Kapil Sibal had proposed free roaming in NTP 2012, all operators had opposed it. Later, when Trai started a consultation process on the issue, the operators highlighted how the same was not feasible and would hurt them.
While operators have a reason to cheer Trai?s stand on the matter, consumers can also rejoice. From next month Trai has reduced ceilings for national roaming calls and SMSes and instituted a new regime for providing flexibility to service providers to customise tariffs for national roamers through special tariff vouchers (STV) and combo vouchers. It has also mandated two types of free national roaming plans to be provided by all service providers.
In short, while one tariff plan would have the option of using roaming services at reduced charges, the other one would be free on payment of fixed charges.
Analysts termed Trai?s approach to be balanced between government?s objective of providing free roaming while not materially impacting the operators? revenues.
?As the current tariffs for most packages in the market are largely in line with the new proposed ceilings, we do not expect most telcos to reduce tariffs to meet the new guidelines. The only exception is incoming calls during roaming whose current tariffs are around Rs 1/min (higher than proposed ceiling of Rs 0.75/min). As telcos would be able to charge a ?one-time? fee to subscribe to special tariff vouchers, they should be able to partially offset any negative impact from incoming roaming rate cut,? Goldman Sachs noted in its report.
The ceiling tariffs prescribed by Trai in 2007 and which currently apply are Rs 1.40 per minute for outgoing local calls and Rs 2.40 per minute for outgoing STD calls while on national roaming. These ceilings have now been reduced to Re 1 per minute and Re 1.50 per minute, respectively.
Similarly, the ceiling tariffs for incoming calls while on national roaming have been reduced from Rs 1.75 per minute to 75 paise per minute. Tariffs for outgoing SMSes while on national roaming, which were earlier under forbearance, have now been capped: Outgoing SMSes (local) at Re 1 per SMS and outgoing SMSes (STD) at Rs 1.50 per SMS. Incoming SMSes will remain free of charge.
These are ceiling rates and actually operators provide tariffs lower than these. The Trai hoped that in future also competition would lead operators to provide rates lower than the prescribed ceiling.
