Indian telco association pushes for ‘floor tariffs’ on data pricing

In an open letter to India’s telecoms regulator, the Cellular Operators Association of India (COAI) has pressed for quicker decision making on pricing restriction rules.

The COAI is in a very interesting position currently. As an association representing the telecoms industry, it is tasked with responsibilities to lobby government authorities for favourable rules. But the question is what are favourable rules?

The association has three core members; Bharti Airtel, Vodafone Idea and Reliance Jio. Two of these members would like more stringent rules on pricing to protect their interests from the disruptive pricing strategies of the third, Reliance Jio.

Jio entered the market at the end of 2015 with data plans to undermine the traditional telcos and free phone calls for new customers. Bharti Airtel and Vodafone Idea suffered because of it and have been calling for more stringent rules to prevent the disruptive Jio from causing even more chaos and continuing to erode profits.

This is a painful position for a telco-neutral association to be in, though it is in favour of floor pricing.

“We expected an early decision by the Authority, on having the Floor Tariffs for the Data services,” Rajan Mathews, Director General of the COAI said in the letter to the Telecom Regulatory Authority of India (TRAI).

“While, we acknowledge that the recent situation on account of COVID-19 might have caused some constraints, however the Authority has started conducting the OHD through online process on various other topics. Accordingly, we request the Authority to kindly hold an OHD on this issue at the earliest.

“The industry is looking forward to an early conclusion on this important matter with great interest and we therefore request the Authority for an early decision on the same.”

The longer this consultation from the TRAI continues, uncertainty prevails. Uncertainty is the enemy of progress and investment in the telecoms industry. A speedy decision would be the biggest net gain for the industry, though it is questionable whether anything can be done quickly in the telecoms industry.


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Jio accuses Indian cellular trade body of foul play

India’s leading mobile operator group thinks the fact that the trade body lobbied on behalf of two others is proof of bias against it.

The trace body in question is the Cellular Operators Association of India (COAI), which apparently wrote to the Indian government yesterday to lobby for some kind of assistance for its members: Vodafone Idea and Bharti Airtel. The thing is Reliance Jio is also a member of the COAI and presumably doesn’t want its competitors to get extra help, so it’s not happy about the letter.

Jio communicated its displeasure at considerable length in a letter of its own to the COAI, which it also shared with Indian media. It characterised the COAI letter as having alleged an unprecedented crisis in the telecom industry and said it was shocked that the letter was sent before Jio had had the opportunity to contribute. It went on to say this is typical bad behaviour by COAI, which calls into question just how shocked Jio actually was.

“Evidently, submission of this letter… is another manifestation of COAI’s prejudiced mindset completely laced with the one-sided thought process,” continued the letter, warming to its theme. “By such unwarranted behaviour COAI has just proved that they are not an industry organization but just a mouthpiece of two service providers.”

It then bangs on about all the things that were wrong with the letter, which amount to the aforementioned bias in favour of Vodafone Idea and Bharti Airtel. Jio clearly doesn’t want its rivals to get any help from the government, and even went so far as to insist that the disappearance of its two main competitors wouldn’t harm competition, which feels like a bit of a reach.

Neither the COAI nor the Indian state seemed to have responded to the letter at the time of writing, but they both seem to be stuck in the middle of an increasingly acrimonious war between Jio and the incumbents whether they like it or not. This is what happens when the state pokes its nose into the commercial sector too much. It created a very benign regulatory environment for Jio and is now staring at a potential monopoly. Nice one.