15-Dec-2009

Indian Telecoms Run to Mamma

Rock bottom rates and tariff wars among mobile operators might soon be a thing of the past with sector regulator Trai deciding to intervene in the market and end years of forbearance. Operators would then have to present a business case each time they come out with a tariff package. Only once the regulator is convinced the new tariffs are profitable would they be approved.

With the Indian telecom market's growing maturity, Trai had moved to a orbearance regime in 2004, wherein operators did not require prior approval for tariff packages, but were left to market forces. Operators simply had to file their tariffs with the regulator within a week of implementing them.

Bharti Airtel (BHARTIARTL.BO: 319.850) CEO Manoj Kohli had recently urged Trai to look into predatory pricing, where operators offer tariffs at below cost.

Well, well, well. Who'd have thought that the market couldn't work it all out? The predator would be bankrupted over time leaving the strongest competitor in the field. Right? Apparently not. Markets work in mysterious ways. Link

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