Cell cos threaten to hike local tariffs

The Cellular Operators Association of India on Wednesday telecom regulator TRAI's order for slashing roaming charges by up to 56 per cent and said the move could lead to increase in basic tariffs.

Terming TRAI's order distressing and disappointing, COAI said the sharp reduction in roaming tariffs was "unwarranted" and this could have adverse financial impact for the industry to the tune of Rs 800-900 crore (Rs 8-9 billion).

"The micromanagement of tariffs for value added services such as roaming would leave service providers with no choice but to review their entire tariff structure in order to maintain the sustainability of their businesses," T V Ramachandran, director general of COAI, said in a statement.

Reacting to TRAI's decision, Bharti Airtel India's largest cellular operator, said:

"We believe that the policy of forbearance of mobile tariffs, which has been followed, has worked extremely well and has enabled market forces and competition to provide the best value to customers."

"We, therefore, believe that a selective departure from policy of forbearance is unnecessary and unwarranted particularly when certain services are currently being offered below cost," Manoj Kohli, president, Bharti Airtel, said.

Reliance Communications declined to comment, but sources in the company said the impact of TRAI's order on company's revenue would be negligible to the extent of only Rs 18-20 crore (Rs 180-200 million).