Promotional offers are not hurting the sector: TRAI

The Telecom Regulatory Authority of India (TRAI) has cited that promotional offers by the telecom companies are not responsible for the poor health of the sector, because the department of telecommunications is not taking reform-oriented steps as recommended by the regulatory body.

"The Trai had also suggested that given the condition of the industry, the government should relax the deferred payment terms for spectrum with a 20-year timeframe instead of the current 10-year regime," the official added. These recommendations, made over the past three years haven't been accepted by DoT.

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"The regulator has, over a period of time, written several recommendations to the Department of Telecom, suggesting reforms such as reduction in licence fee and the universal services obligation fund (payment), relaxing payment for auctions, so on and so forth," a senior official at the Telecom Regulatory Authority of India (Trai) said.

Recently, Telecom Commission has written a letter to the telecom regulator and said that the decision to allow Jio to offer free services beyond the 90-day period permitted for promotional tariff plans had affected the sector's revenue.

TRAI had suggested various options to the Department of Telecom in a recent past, like keeping the spectrum usage charges (SUC) at a uniform 3 percent, reducing the license fee to 6 percent from 8 percent and lowering the Universal Service Obligation Fund contribution by telecom companies to 1 percent from 5 percent.

The Trai had also suggested that given the condition of the industry, the government should relax the deferred payment terms for spectrum with a 20-year timeframe instead of the current 10-year regime," the official added. These recommendations, made over the past three years, haven't been accepted by DoT.