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Indian telcos call on regulator to introduce minimum pricing guidelines ASAP

Indian telcos currently trade on some of the finest margins in the world, with ARPU hovering around $1.50

Indian telcos call on regulator to introduce minimum pricing guidelines ASAP

Key players in India’s beleaguered telecoms sector have banded together to request that the Telecoms Regulatory Authority of India (TRAI) implements a minimum pricing rule that would present operators from offering services below a certain price.

India’s telecoms sector has seen its average revenue per user (ARPU) plummet in recent years, as operators engage in a race to the bottom on price. The situation has been exacerbated by the launch of Reliance Jio in 2016, who has bought a range of ultra low cost data tariffs and handsets to the market, attracting over 330 million subscribers and becoming India’s biggest telco in the process.

However, with ARPU in the mobile sector hovering around $1.50, Reliance’s competitors are struggling to break even.

According to a report in The Times of India, The Cellular Association of India has written to the TRAI seeking discussions on the viability of introducing minimum pricing legislation “at the earliest”.

“Given the financial pressure on the sector and the fact that ARPU and tariffs of the Indian telecoms sector are the lowest in the world, floor pricing is imperative to ensure that the sector is sustainable, and is in a  position to bear the deferred spectrum and AGR (Adjusted Gross Revenues) dues, while continuing to invest in world class networks and services,” the letter from the COAI read.

Earlier this year, Vodafone Idea, Bharti Airtel and Reliance Jio agreed to unilaterally kill off their very cheapest tariffs in an attempt to raise ARPU.

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