Telecom firms pitch for differential tariffs

On-network calls will help increase mobile telephony penetration in the country.

Barring Shyam Telelink, most telecom players in India favour the continuation of differential tariffs between on-network and off-network calls.

They claim that it will result in substantial savings for subscribers. Operators have also said that on-network calls, calls that originate and terminate on the same network, will help increase mobile telephony penetration.

The Cellular Operators Association of India (COAI), in its reply to the Telecom Regulatory Authority of India's (Trai) consultation paper on differential tariffs on-network, said, "On-network calls do not require any pay out by the access provider on account of interconnect usage charges as these are being made within the operator's licensed network and do not involve usage of any facilities, or network elements that belong to other operators".

Hence, they should be allowed to continue offering differential tariffs for such calls, it added.

According to Tata Teleservices (TTSL), differential tariffs for calls within the network of the service providers should not be treated as "discriminatory".

"As Trai has ordered forbearance in tariffs, the service providers are free to set any tariff in the interest of consumers. Tariffs of this type are a way to build brand loyalty, reduce subscriber churn and promote competition. Such practices are precedent world over and permit operators to take advantage of their network rollouts and optimise network utilization", TTSL said.

The telecom companies have also invested in networks, resulting in sinking of costs. Differential tariffs are consumer friendly, it said.

The state-owned Mahanagar Telecom Nigam (MTNL) said that marketshare is affected by several factors, of which, tariffs are important. The vertically integrated players have an advantage over small and stand-alone operators.

Stating that the uniform charge of Re 1 for calls across the country, by an integrated operator "is a glaring example", MTNL said, there may be need for differential tariffs in view of intense competition but IUC charges are a must.