Trai warns telecom companies on freedom to fix call rates

The Telecom Regulatory Authority of India (Trai) will review the freedom of service providers to fix call and service rates if they increase tariffs beyond the current base rates.

"I am being open; there is nothing to hide," Trai chairman Rahul Khullar told reporters on Wednesday.

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 of rates on leased lines that could lead to cost saving for mobile operators.

Base rates, or headline tariffs, are the maximum call or service rates that an operator can charge to its customers but normally companies charge less than these rates. Currently, most operators have fixed base rate at 2 paise per second.

The regulator allows free hand to fix telecom call and service rates as it feels that competition in the market will keep control on tariffs.

"It's a separate matter. If (spectrum) sharing leads to lower cost, they may be able plough it back or they may want to put that cost in to larger profits. Better yet if they can use to service debt. All telecom operators are in heavy debt and debt has to be paid otherwise what will happen to banks," Khullar added.

Trai also recommended extension of the licence period of direct-to-home (DTH) broadcasting operators to 20 years and reducing the licence fees to eight per cent of the adjusted gross revenue for the new licensing regime.

The regulator has stated that vertically integrated broadcasters must be subjected to a set of additional regulations allowing them to control only one distribution platform operator.

Vertically integrated broadcasters are entities which run TV channels as well as distribution platforms such as multiplesystem operator and DTH.