TRAI chairman opined his views that the regulation going forward would strive for a balance between consumer interests and re-investment-driven-growth from a more profitable industry.
Ban on combo vouchers maybe lifted soon:
The chairman admitted that the ban on combo vouchers hit industry profitability hard in 1QFY13. TRAI would issue guidelines shortly on the possible reintroduction of combo vouchers.
TRAI Working on M&A Rules
Current M&A guidelines have some potential deterrents in the form of spectrum usage charges being applied on the total spectrum of the merged entity and higher excess spectrum charges. The chairman’s view on industry consolidation is in line with the market reality of some telcos having too much debt and accumulated losses. TRAI is expected to clarify further on M&A guidelines with a view to making them less obstructive than at present.
TRAI may not Oppose / Regulate Tariff Hikes
The chairman expects consolidation resulting in tariff increase. He also highlighted TRAI’s own 15% tariff increase analysis based on higher spectrum costs, implying that such tariff increases are unlikely to incur regulatory wrath. The tariff increase is inevitable considering the high fixed cost structure the industry would move to if spectrum is won at the current base prices or if expensive M&A deals eventuate
Stricter KYC Norms from DoT
DoT recently passed an order on new subscriber (pre-paid and post-paid) verification comes into effect from 9th of Nov. These norms are tighter in that an employee of the telecom operator must add designation details and attest in the customer acquisition form (CAF) that subscriber details are in the database (earlier distributors did this). Further, only after this will the SIM get activated (earlier it was activated before data base entry).
