With competing claims for funds, DoT not in favour of tariff subsidy

Multiple requests and letters from non-public telecom corporations and trade our bodies however, the Department of Telecommunications (DoT) is unlikely to offer any help within the type of ground value for tariff or subsidy for a similar within the close to future, senior authorities officers stated.

“There are multiple and competing claims on the total funds that we have. And the priorities of the government must be on food, fertiliser and farmer subsidies. So a subsidy on tariff for telcos is not likely in the near future,” an official stated. Sources stated that the demand for a ground value on tariff had been raised as soon as once more after the Telecom Regulatory Authority of India’s (Trai) suggestions on base value of 5G spectrum have been launched. The prime government choice making physique of the DoT, the Digital Communications Commission, too has accepted the suggestions of the Trai.

“Multiple suggestions were floated. One was to provide some support from the USOF (universal service obligation fund) while other was to provide some subsidy to telcos whose ARPU (average revenue per user) has remained between $2-3 range for quite some time now,” an official stated.

All the three non-public telecom gamers in addition to trade physique Cellular Operators Association of India (COAI) have repeatedly raised the demand for a ground value on telecom tariff which might assist them enhance their common income per person. The newest such demand was made after the telecom bundle of September 2021, when the trade gamers urged the federal government to consider introducing a ground value within the second leg of the reforms. In a current letter to the DoT, COAI had stated that the demand for a ground value on each knowledge and voice companies was “a legitimate demand” given the monetary well being of the telecom gamers.

“Given the financial pressure on the sector and the fact that ARPU (average revenue per user) and tariffs of the Indian telecom sector are the lowest in the world, floor pricing is imperative to ensure that the sector is sustainable,” COAI had stated in its letter.

Even state-run telecom firm Mahanagar Telephone Nigam Limited had in its response to the Trai consultations, had stated given the well being of the sector, there was an pressing want of “regulatory intervention” for “tariff fixation”.