Telecom Shares in Focus: TRAI Reintroduced Prepaid Recharges for Voice and SMS Services

On December 23, 2024, the Telecom Regulatory Authority of India (TRAI) reintroduced prepaid recharge options specifically for mobile customers who only need voice and SMS services. This new option, called a Special Tariff Voucher (STV), aims to offer consumers more flexibility by allowing them to pay for only the services they need.

TRAI believes these STVs will particularly benefit certain consumer segments, such as the elderly and residents of rural areas.

According to a TRAI notification, “The Authority is of the view that a separate Special Tariff Voucher (STV) for Voice and SMS, in addition to existing data-only STVs and bundled offers, shall be mandated.” The update revises the definitions of STVs and CVs in the Telecom Tariff Order of 1999 to implement these changes.

Impact on 2G and Dual-SIM Users

Currently, telecom providers offer bundled plans that include data, voice, and SMS services, which can be costly for users who only need voice and SMS. This is especially common among dual-SIM users or those relying on 2G networks.

To address this, TRAI will enforce new regulations that allow customers to access more affordable and targeted Voice+SMS plans. This change is expected to benefit the approximately 150 million users in India who still use feature phones with 2G connectivity.

Impact Effect on Telecom Companies

Telecom companies often bundle data with voice and SMS plans, which can be expensive for users who only require the latter services. In July 2023, TRAI published a consultation paper addressing these issues, noting that bundled offerings limit consumer choice. The new guidelines aim to offer more affordable, tailored options to users.

Reaction of Telecom Shares

The telecom shares recorded a muted reaction after the release of new guidelines by TRAI. The below shares performance have been recorded at 10:10 AM on December 24, 2024

New SIM Card Issuance Rules

In addition to these changes, the Indian government has introduced updated regulations for SIM card issuance, effective December 1, 2023. The key changes include:

• All SIM card vendors (Point of Sale agents) must register with telecom operators and undergo police verification, submitting documents like Aadhaar and a passport.
• A formal agreement between the telecom operator and SIM vendor will be mandatory, detailing customer registration, operational areas, and actions in case of violations.
• Selling SIM cards without proper registration can lead to fines of up to Rs 10 lakh and a three-year blacklist.
• An e-KYC (Aadhaar-based electronic KYC) process will be required for all new SIM cards and SIM swaps.
• Bulk sales of SIM cards are now prohibited; individual KYC verification will be required for each business user.
• Disconnected mobile numbers will not be reassigned until 90 days have passed.
• The maximum number of SIM cards an individual can hold is now nine, with the limit set to six in Jammu and Kashmir and northeastern regions.
• SIM cards that remain inactive for 30 days will have outgoing services suspended, and after 45 days of inactivity, incoming services will also be blocked.

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