Telcos can fix call tariff depending on market conditions

Telecom service providers can fix call tariffs depending upon the market conditions and commercial requirements but within the regulatory framework of the telecom department, Minister of State for Communications and IT Milind Deora said Friday.

Last Updated: Aug 26, 2011, 16:39 PM IST

New Delhi: Telecom service providers can fix call tariffs depending upon the market conditions and commercial requirements but within the regulatory framework of the telecom department, Minister of State for Communications and IT Milind Deora said Friday.

"The operators have the flexibility to fix the tariff for mobile services depending on the market conditions and other commercial considerations subject to the regulatory principles of non-discrimination, compliance of interconnection usage charges and non- predation," said the minister in a written reply to the Rajya Sabha.

The tariff for mobile services has shown a continuous downward trend for several years. However, led by telecom giant Bharti Airtel, leading operators including Vodafone, Idea cellular, Aircel and Reliance Communications recently hiked their call tariffs in select circles.

Airtel's move gave a break to the cut-throat competition among telecom operators offering dirt cheap tariffs.

With the entry of new players and the ensuing tariff wars, the high priced bidding for 3G auctions, which saw top operators like Bharti Airtel and Reliance Communications coughing up Rs 12,295 crore and Rs 8,583 crore, respectively, had led to margins being hammered.

The operators have also cited high 3G and BWA (broadband wireless access) auction prices and continuously declining margins as reasons behind the hike.

IANS