In a boost to basic telephone operators, the Telecom Regulatory Authority of India (Trai) today removed the Rs 450 floor on monthly rentals for wireless-in-local-loop (WLL) services and set Rs 200 as the standard rental. Trai has also allowed flexible tariff packages for limited mobility. The Trai decision means limited mobility is now cheaper than even a fixed-line service, where the customer pays Rs 250 as monthly rental.
The decision has upset cellular operators who said Trai had gone back on its own stand that any reduction in rentals would disturb the level playing field between cellular and basic operators. "It is a mockery of the regulatory process," they said. The Cellular Operators' Association of India said it was discussing the order with its legal advisors to determine a course of action.
Trai has also brought down the refundable deposit for handsets from Rs 10,000 to Rs 6,000 in cases where they are provided by the operator. The operator also has the option of charging an additional monthly rental of up to Rs 50 in lieu of the deposit.
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The decision is in line with the demands of the basic operators who had claimed that the high rentals were taking limited mobility beyond the reach of the common man. This was the same plank used by the government when it allowed the service despite opposition from the cellular operators.
The slash in rentals makes limited mobility much more attractive compared to cellular services. Against the average monthly rental of cellular services at Rs 250, limited mobility customers have to pay Rs 200. While a mobile customer pays Rs 1.40 per minute, limited mobility is available at Rs 1.20 for three minutes. S C Khanna, general secretary of the Association of Basic Telecom Operators, said, "The decision has made limited mobility affordable for the common man. All basic operators will now be able to aggressively roll out their services."
The only hurdle remaining before basic operators go for a full-fledged roll-out of limited mobility is a case filed by the cellular operators in the Supreme Court against the government's decision to allow limited mobility. The case is coming up for hearing later this month.
Trai last year specified a floor of Rs 450 and a ceiling of Rs 550 per month as rentals for limited mobility. This was opposed by the department of communications, the standing committee on information technology and telecommunications and various consumers groups. Explaining the rationale behind departing from its earlier decision, Trai said last year the thrust was to encourage efficiency and growth of the service while not giving the incumbent opportunity to use its market dominance.
"In the current scenario, wherein the cost estimates of the emerging competitors are already below those of the dominant incumbent, the latter's ability to put competitors at any serious disadvantage seems to have been fairly restrained. The authority has considered not to prescribe any floor and allow competitors to work effectively," Trai said, adding that it would monitor the situation against predatory pricing.
On the issue of flexibility in tariffs, Trai has said the market competition has been more established with this move. "This may give further impetus to efficiency increases and tariffs packages being developed to encourage access and usage,