“Jio wants floor price to be fixed at Rs 15 per GB initially against current prices of Rs 9 to Rs 12 per GB“
Reliance Jio is the latest telecom operator to be seeking a price hike in floor prices of data. According to reports, Reliance Jio has proposed to the Telecom Regulatory Authority of India (TRAI) that the floor rate of data should be set at Rs 15 per gigabyte of data and should gradually increase to Rs 20 per GB over a span of six to nine months. However, Jio has stated that tariff for voice calls should remain under control, since voice calls are a more mass product than data, and increasing prices for voice calls would affect too large a section of users. Currently, users have to pay between Rs 9 to Rs 12 per GB of data.
The regulatory telecom body is presently considering methods to aid an ailing Indian telecom industry, which is under severe stress due to constricted per user revenue, low tariff, an uber competitive industry and heavy losses incurred by factors such as Adjusted Gross Revenue (AGR). While Jio’s recommendations to TRAI have come basis the body’s consultation paper titled ‘tariff issues in telecom services’, Jio has further stated that in a bid to decrease the consumer impact of the increase in floor price of data, the rollout should be phased in two or three steps, and ideally take six or nine months to be implemented.
Jio also stated that the data floor price, once implemented, should be enabled uniformly for all users, including individuals and corporates. This would further help operators in the Indian telecom sector increase the average revenue per user, which in turn can largely help out telecom operators recover from the loss-inducing business condition that they are presently running with. Jio’s fellow operators in what essentially is a three-operator market has also made similar claims, and even after a price hike of up to 50 percent in certain prepaid plans, the market looks certain to be heading towards yet another price revision.
Vodafone-Idea has also applied for a price revision with TRAI, suggesting data floor price of Rs 35 per GB, and calling charges of 6p per minute to be implemented ubiquitously across the industry. However, data prices for consumers in India, thanks to running promotional campaigns, can be as low as Rs 3 per GB, which offers such as the Vodafone double data promotion has enabled. Given the scope of a near-10x increase in data prices suggested, it remains to be seen how TRAI regulates the industry to find the best middle ground for both consumers and operators.