Ravi Shankar Prasad Refuses To Step In To Raise Tariffs; Tells Vodafone Idea To Battle Competition On Its Own

Telecom Minister Ravi Shankar Prasad, according to a report in The Economic Times (ET), turned down the proposal of Vodafone Idea top executives to interfere in raising tariffs, and asked them to take to internal measures in order to tackle the competition.

It is believed to have been brought up in a meeting, which was described as “a courtesy call” in a statement released by Vodafone Idea, that the ministry’s intervention in raising tariffs could help the sector recover from the losses due to on-going price war.

“In a recent meeting with the minister, Vodafone Idea top executives, including Aditya Birla Group chairman Kumar Mangalam Birla and Chief Executive Officer (CEO) Ravinder Takkar, highlighted the cash flow challenges faced by the telco, and how a rise in tariffs could turn the sector around, and help the telco as well,” ET quoted a source from the meeting.

Although Prasad agreed to the fact that the telecom sector was undergoing high debts and dropping revenues resulting in financial distress for the industry, he showed his inability to step into the matter mentioning that tariffs were the prerogative of the Telecom Regulatory Authority of India (TRAI) and were out of his jurisdiction.

The meeting was set up in the wake of Takkar’s appointment as the Managing Director (MD) and CEO of the telecom operator, who took over the post last month from Balesh Sharma.