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The Telecom Regulatory Authority of India (Trai) has warned that it will review service providers' freedom to fix mobile call and service rates if they increase these .
"I do not expect headline rates to change. If they change, as and when they change, I have told the industry, then the regulator reserves its right to go back and look at it again if forbearance should be continued or not. I am being open, there is nothing to hide," Trai Chairman Rahul Khullar said here.
He was responding to a question on the possible changes in mobile rates, following recent recommendations by Trai on issues such as spectrum sharing and lowering of maximum rates on leased lines that could lead to cost saving for mobile operators.
Base rates or headline rates are the maximum call or service rates a telecom operator can charge customers normally, companies charge less than these. At present most of the telecom operators have fixed base rate at two paise a second.
The regulator allows free hand to fix telecom call and service rates as it feels competition in the market will control these.
"It's a separate matter if (spectrum) sharing leads to lower cost. They may be able to plough it backor they maywant to put that cost into larger profits. Better yet if they can use it to service debt. All telecom operators are in heavy debt and debt has to be paid, otherwise what will happen to banks?" Khullar said.
Trai has recommended that government allow sharing of all categories of spectrum held by telecom companies for mobile services.
If this is approved, operators will be able to bring down cost of ownership of radiowaves which has increased to about five times compared to its price of Rs 1,658 crore under old licencing regime.
Khullar said mobile rates were low earlier because telecom operators were fighting to attract the customers of their competitors, and in the process they were offered calls at lower rates than their actual costs.
He said telecom operators who were in heavy debt or making losses started cutting down on freebies and some changed their headline tariff.
"They did it at rate of something like two percentage," Khullar said. Telecom companies have raised mobile base rates by about 100 per cent between 2011 to 2013 and more frequently after cancellation of 122 2G telecom permits by Supreme Court in February 2012.
On a proposal that STD call rates should be equal to local calls, Khullar said that government will have to look for solution to compensate national long distance operators - a key intermediary for transmitting calls, to bring STD call rates on par with local ones.
"No such reference has come to us from government. If it comes we will see what all can be done," Khullar said.
