Floor Price For Tariffs: TRAI Says No Word Yet From Telecom Department
A man uses a mobile phone while sheltering from the rain under a cardboard box in India. (Photographer: Prashanth Vishwanathan/Bloomberg) 

Floor Price For Tariffs: TRAI Says No Word Yet From Telecom Department

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The telecom department has not yet approached Telecom Regulatory Authority of India for its views on floor price for tariffs, TRAI Chairman RS Sharma said Friday.

"We have not received anything," Sharma said.

Shares of Vodafone Idea Ltd. and Bharti Airtel Ltd. rose on likelihood of a floor price for telecom tariffs, a day after they posted record losses in the September quarter.

The government has constituted a committee of secretaries to explore a telecom bailout package. Last month, when the high-level panel was set up, an official source had said that TRAI is expected to examine prescribing minimum charge for voice and data services, which will ensure long-term viability and robust financial health of the telecom sector.

This isn't the first time that a floor price for telecom tariffs has come up for discussion. In 2017, certain operators had suggested fixing of minimum floor price for voice and data services, but TRAI subsequently ruled out such an imposition, saying the industry had, after discussions, agreed that it is "not a workable idea".

Incumbent telecom operators Vodafone Idea and Bharti Airtel are currently staring at massive financial outgo in unpaid dues after the Supreme Court last month upheld the government's way of calculating telecom revenue, on which licence fee and spectrum charges are computed.

Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies.

Also read: Vodafone CEO Says India Venture Is at Risk of Collapse

The Supreme Court has given three months to the affected telcos to pay the AGR dues to the DoT. On Wednesday, the government shot off notices to telecom operators to pay their revenue share dues within the timelines stipulated by the court. The telecom department has given option to operators to clear all dues on self-assessment basis.

On Thursday, Vodafone Idea and Bharti Airtel reported a combined loss of Rs 74,000 crore for the quarter ending September, as they set aside funds to cover AGR dues.

Also read: Supreme Court’s AGR Order May Have Impact Beyond Telecom Firms

While Vodafone Idea posted a loss of Rs 50,921 crore, the highest-ever quarterly loss by any corporate in India, Airtel reported loss to the tune of Rs 23,045 crore.

On Friday, Vodafone Idea shares rose 24.75 percent to Rs 3.68 apiece on the BSE those of Airtel advanced 8.42 percent to Rs 393.20. The benchmark Sensex gained 0.17 percent to end the day at 40,356.69 points.

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