The entry of Reliance Jio has stirred the telecom sector by offering data and voice calls at dramatically lower prices. TRAI is going to examine the floor pricing issue and will come up with a solution. The telecommunication subscriber base in the country has reached 1,198.89 million in April, but the growth continued its downward trend in line with the slower pace of new customer addition by Reliance Jio.
Recently, the Competition Commission of India dismissed Airtel’s complaint against Jio saying that offering free services by a new entrant in the industry is not anti-competitive. Still, many telecom operators are taking a stance of contesting CCI’s decision. The companies believe that offering data and voice services below cost tariffs to consumers over a period of time may harm the industry financially.
Many market observers believe that TRAI should not entertain telecom companies demand to set up floor pricing for data and voice calls services. Setting up floor price in one sector may trigger similar moves in more financially distressed sectors like steel and real estate.
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