TRAI Floats Consultation Paper on Regulatory Principles of Tariff Assessment

Taking note of the changing dynamics of the telecom industry, the sector regulator on Friday issued a consultation paper to discuss various regulatory principles of tariff assessment.

The Consultation Paper on Regulatory Principles of Tariff Assessment issued by Telecom Regulatory Authority of India (TRAI) sought stakeholders' opinion on various crucial issues like transparency in tariff offers, non-discriminatory offers and predatory pricing by operators.

The stakeholders are requested to furnish their written comments by March 17, 2017 and counter-comments by March 24, 2017.

The TRAI in its consultation paper said regulatory oversight over tariff is required to ensure the observance of regulatory principles.

Accordingly, TRAI regularly monitors tariffs prevalent in the market to ensure their consistency with the regulatory principles.

"A telecom service provider (TSP) has the flexibility to decide various tariff components for different service areas of their operation subject to the reporting requirement and adherence to other regulatory guidelines in vogue.

"Flexibility given to the TSPs by tariff forbearance is a core feature of current tariff framework. At the same time, several regulatory principles have been laid down to ensure protection of consumer interest and orderly growth of the sector," the paper said.

In the year 1999 when the Telecommunication Tariff Order (TTO) framework was put in place, the telecom sector was primarily voice centric.

"However, in the recent past, there has been a shift from voice to data, driven by technological and other factors like change in user profile, proliferation of social media, development of innovative content and applications, falling cost of devices etc," the paper said.

The paper asked stakeholders: "Do you think that the measures prescribed currently are adequate to ensure transparency in the tariff offers made by TSPs? Whether current definition relating to "nondiscrimination" is adequate?"

Apart from regular tariff offers that are launched by the various TSPs, 'promotional offers' are given to customers with a view to incentivise their subscription and increase the subscriber base. These are different from the tariff offers itself and are in the nature of benefits available to customers for a limited period of time.

"Which tariff offers should qualify as promotional offers? What should be the features of a promotional offer? Is there a need to restrict the number of promotional offers that can be launched by a TSP, in a calendar year, one after another and/or concurrently?"

It also touched upon the issue of predatory pricing in the consultation paper.

"What methods/processes should be applied by the Regulator to assess predatory pricing by a service provider in the relevant market?" it asked.