Economic Times (ET) has reported that TRAI appears to be pushing back against the suggestion of putting a floor price for voice and data services as the regulator believes it will be impractical.
Key Insights :
- Minimum pricing for voice and data services is a desirable outcome for Bharti Airtel and Vodafone Idea but not essential. Minimum pricing would have been more relevant in 2017 when Jio was offering its services for free then presently. With Jio being the market leader, sector is likely to witness further price war.
- Already, recent price moves by Jio (due to IUC charges) has given Vodafone Idea and Bharti Airtel headroom to improve pricing by 10-15% in the near term.
- Setting minimum pricing can have a significant impact on long-term viability of the sector if it is materially above current pricing.
- There are also reports about government offering long payment terms (15-20 years) for AGR dues which will also provide cash flow relief to incumbents.
- The current situation in the India telecoms sector continues to be fluid with a lot hinging on government’s relief measures as a large part of telcos debt is owed to the government.
Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.
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