TRAI decision to up processing fee to affect 90% pre-paid users

Telecom Lead India: TRAI’s decision to increase
processing fee by 50 percent for all mobile recharge coupons is set to affect
more than 90 percent pre-paid users in the country. More than 95 percent of
India’s 900 million mobile users are on pre-paid connection. The processing fee
is included within the MRP of recharge coupon purchased.

Through the Union Budget recommendation, the government has recently increased
service tax on mobile services. The increase in processing fee will become
another blow to mobile users in the country.

TRAI cleared the increase of 50 percent in the charge
through an amendment made to the Telecom Traiff Order (TTO) after about
two-and-half years.

Though the telecom regulator has approved increase in
processing fee for all mobile recharge coupons (top-up vouchers) priced above
Rs 20, there will be no change in the processing fee for the vouchers below

Authority has decided to increase the ceiling on Processing Fee on Top up
vouchers to Rs 3 from Rs 2 in respect of Top up vouchers having maximum retail
price (MRP) of Rs 20 and above and to continue with the existing ceiling of Rs
2 in respect of top up vouchers having MRP of less than Rs 20.

TRAI noticed that top up vouchers priced below Rs 20 are not available with
some service providers and directed all telecom service providers to provide
consumers with at least one top up voucher priced at Rs 10.

With a view to protect the interests of users, the Authority mandates that
every service provider shall offer and make available to the consumer at least
one top up voucher, of denomination of Rs 10, according to TRAI.

The order comes after telecom industry body COAI and AUSPI made written
submission to the Telecom Regulatory Authority of India arguing that there have
been inflationary pressures over the last three years, since the ceiling of Rs
2 was prescribed by Trai.

COAI has also cited the rising cost of providing services by way of hike in
salaries and wages, increased transportation and diesel cost and so in support
of raising the fee.

TRAI considered views of consumer groups that the top up vouchers of smaller
denominations should be exempted from hike in processing fee in order to
protect interests of marginal and low usage subscribers and hence left
processing fee on lower denominations recharge coupon untouched.


[email protected]