Outside a Reliance Communications Ltd. Mobile Store in Mumbai | Dhiraj Singh/Bloomberg
Outside a Reliance Communications Ltd. Mobile Store in Mumbai | Dhiraj Singh/Bloomberg
Text Size:

Mumbai: India’s telecommunications regulator said that while courts have blocked its attempts to reign in “predatory pricing” by carriers, market forces are easing a tariff war that has left the country’s three big carriers saddled with debt.

In one signing of easing competition, Reliance Jio Infocomm Ltd. earlier this month said it was imposing a charge on voice calls that were formerly free. The move reversed an offer that, along with cheap data packages, had accelerated a years-long competitive battle that pushed the market price for 1GB of data per month to less than a dollar.

“Market forces are working on predatory pricing,” Ram Sewak Sharma, Telecom Regulatory Authority of India chairman, said in an interview.

Jio, which pushed its way into first place this summer after jumping into the market in 2016 with a promise of free voice calling for life, is raising prices just as rivals Bharti Airtel Ltd. and Vodafone Idea Ltd. are posting losses and selling some assets to raise cash. Jio’s reversal on free calls could mark a turning point in their quest for profitability.

For its part, the government said late Wednesday it will spend about 410 billion rupees ($5.8 billion) on two unprofitable state-run telecommunication companies to help them take on competition. Mahanagar Telephone Nigam Ltd., which provides services in Mumbai and New Delhi, and Bharat Sanchar Nigam Ltd., that serves the rest of the nation, would merge under the plan, Telecom Minister Ravi Shankar Prasad said at a briefing in New Delhi. MTNL has reported losses in nine of the past 10 years, according to data compiled by Bloomberg.

While Jio’s competitors have cried foul over its strategy of entering the market with free services, courts haven’t gone along with TRAI’s attempts to regulate pricing, Sharma said. Attention has focused again on the government as carriers prepare to upgrade networks to 5G. The government has said it may ask as much as $84 billion to license airwaves needed for the high-speed services.

Carriers have said they need lower spectrum prices to make 5G affordable.

Sharma said the regulator sees prices set by the government for spectrum as “reasonable,” and that it’s up to carriers to take the next step.

“Government has done everything it needs to do for 5G,” said Sharma. He also said carriers should not have to pay up-front for spectrum licenses, but instead should pay two years first, then every year after that.

He said TRAI has already made its spectrum recommendations to the government and that he couldn’t comment further. – Bloomberg

Also read: India Inc loves retired bureaucrats. Modi govt can stop the stink with cooling-off period


Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it

You are reading this because you value good, intelligent and objective journalism. We thank you for your time and your trust.

You also know that the news media is facing an unprecedented crisis. It is likely that you are also hearing of the brutal layoffs and pay-cuts hitting the industry. There are many reasons why the media’s economics is broken. But a big one is that good people are not yet paying enough for good journalism.

We have a newsroom filled with talented young reporters. We also have the country’s most robust editing and fact-checking team, finest news photographers and video professionals. We are building India’s most ambitious and energetic news platform. And have just turned three.

At ThePrint, we invest in quality journalists. We pay them fairly. As you may have noticed, we do not flinch from spending whatever it takes to make sure our reporters reach where the story is.

This comes with a sizable cost. For us to continue bringing quality journalism, we need readers like you to pay for it.

If you think we deserve your support, do join us in this endeavour to strengthen fair, free, courageous and questioning journalism. Please click on the link below. Your support will define ThePrint’s future.

Support Our Journalism

Share Your Views


Please enter your comment!
Please enter your name here