Era of free data offers and free calls might end soon, here's why

Telecom Regulatory Authority of India (Trai) will hold a meeting with all telecom companies on July 21 to seek their views on fixing a 'minimum floor price' for voice and data tariffs, as being demanded by some players, a senior official confirmed.

The minimum floor price, for both data and voice calls, has been demanded by a section of incumbent telecom operators, but implementing it could mean an end to freebies in the market. The tariffs are currently under forbearance giving telcos virtually a free hand in fixing the rates and they report plans to Trai within 7 days of launch. Trai will seek the rationale for the floor price demand, and has asked operators to also give detailed presentation to support their arguments. It is also expected to ask the telcos why an upper ceiling for tariffs is not similarly justified.

The demand for imposition of a floor price first came up last month, at industry's meetings with the regulator and separately with the interministerial group (IMG).

Highlighting the growing financial stress on operators, Idea Cellular, in its presentation to the IMG had said that the industry has been witnessing losses and negative returns driven by below cost tariffs that are predatory.

Only solution is to have floor prices for voice, SMS, and data services so mobile telecom businesses generate adequate profits to invest and then compete based on quality of services it had said. The demand has come in the wake of Mukesh Ambani promoted Reliance Jio making a dramatic entry into the telecom in September last year, with free voice and data services on a promotional basis.