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The TRAI announced a new monthly rental regime for WLL (M). This was the result of the first annual review of these rentals by the authority. When the WLL (M) rentals were announced last year, TRAI had specified that it will conduct annual reviews for each of the next three years to ascertain and specify any changes in the monthly rentals. The monthly rentals notified today is the result of the first such review.Â
The main features of the Authority's notification are
The Authority has specified a monthly rental of Rs.200.00 per month in the standard tariff package as against the rentals fixed last year which gave a range of Rs.450-550 per month as floor and ceiling respectively.Â
If the handset is provided by the service provider, then the payment for that handset can be taken either as a refundable deposit with a ceiling of Rs. 6,000/-, or an additional monthly rental ceiling amount of Rs. 50/-.Â
The monthly rental is specified as part of the standard tariff package which must be mandatorily on offer to the customer. In addition, the service provider will be able to offer alternative tariff packages similar to other tariffs of basic services, and all other telecom services provided in the market.Â
The Authority will monitor the situation so that predatory pricing does not take place.Â
The new regime for WLL (M) monthly rentals represents a significant departure from the existing regime. Earlier, the Authority had specified a floor and a ceiling for these rentals, which have not been considered necessary under the new regime. Last year, the Authority had specified a floor and ceiling for WLL (M) monthly rentals in view of the major uncertainty about the underlying costs and the roll-out plans, and the large range for the cost based rentals that were calculated from the data submitted by the service providers. This year, there is much greater certainty regarding costs and other underlying parameters, including roll-out plans. For example, costs for one service provider which has wide presence in the country are based on actual purchase order, and another estimate is based on certified prices offered by the equipment vendors. The cost estimates were further verified through detailed discussions, documents regarding roll-out plans were obtained, and special effort was made to ensure that the costs reflect all the license conditions including those relating to deployment in rural, semi-urban and urban SDCAs in equal proportion.Â
Under the previous regime for WLL (M) monthly rentals, a floor was specified based on costs of the Most Efficient Private Operator (MEPO), which were then, above those of the incumbent. This year's estimates show a major change in this regard in as much as the cost based estimates of monthly rental for MEPO is below that of the incumbent. Given the low rental estimate, using the MEPO rental as a floor would not be meaningful, especially when the estimate of monthly rentals is
compared to the other corresponding prevailing tariffs.