COAI warns roaming-rate cuts could lead to hike in local tariffs

The Cellular Operators Association of India (COAI) has criticised 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 the order as "distressing and disappointing", COAI said that the sharp reduction in roaming tariffs was "unwarranted" and this could have adversely impact the industry by Rs800 to Rs900 crore.

In a statement, T V Ramachandran, director general, COAI, said, "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."

Manoj Kohli, President, Bharti Airtel, India's largest private 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," Kohli added.

Reliance Communications declined to comment, but sources in the company said the impact of TRAI's order on company's revenue would be a negligible Rs18-Rs20 crore.