Talk your heart out as cell tariffs may fall further

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New Delhi, Feb 8: The government is finalising a detailed policy and regulatory environment aimed at ensuring a steep reduction in mobile telephony rates from their present levels. As per the new vision, mobile tariffs in India, which are already the lowest in the world, could fall to a tenth of its current rates to 10 paise per minute for local calls and 25 paise for STD calls within the next two years.

At present, the average local call tariff is about Re 1 per minute while for STD it is about Rs 2.40 per minute. The communications ministry has apprised prime minister Manmohan Singh of the draft proposal on cellular tariffs, and he has extended complete support for the plan, a top government official told the mediapersons.

An official, who oversaw the preparation of this plan and also apprised the PM of this development, outlined the proposal: The plan involves the Department of Telecom (DoT) first implementing a series of policy decisions providing the requisite spectrum to existing operators, carrying out the auction of 3G spectrum, introduction of number portability, giving licences to new players to enhance competition, promoting large-scale infrastructure sharing all within the next couple of months.

He said, the idea is to help lower telecom firms operating costs and also kick off price wars. The official in the communication minstry, however, declined to comment on record. In fact, the communications ministry will go all out to ensure that telcos comply.

Through favourable policy decisions, the government will first encourage telcos to bring down the rates voluntarily in a phased manner over the next two years. However, the government is also open to asking sector regulator Trai to fix tariffs, as is being done in the power sector with regard to rural electricity rates,the source said. The plan is to reach the 10-paise and 25-paise tariff slabs for local and STD calls, respectively, by 2010 and this would be done in a phased manner over the next 24 months.

The DoT has also made it clear that, if need be, the government is willing to seek the regulator's help to achieve its goals. In fact, telecom minister A Raja is believed to have been warm to the idea of a tariff fixation in case the competition formula does not work. Mr Raja wants tariffs to be capped and had even recently told Parliament: We have decided to refer the matter back to Trai to see whether tariffs need to be fixed.

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