Telecom tariffs are set to increase after Bharti Airtel, the country’s biggest cellular service provider, on Wednesday said the present rates are difficult to sustain and that it is mulling a hike. “The industry needs revision (of tariffs). However, we cannot raise prices in isolation. The industry needs to take a call,” Sanjay Kapoor, Bharti Airtel’s CEO (India and South Asia), said after the company reported a 30% decline in net profit for the quarter ended September.
Industry experts believe other players, bruised by intense competition which has kept call rates low and is hurting their margins, will follow suit. Kapoor said the widely discussed figure of a 100% hike was a “good benchmark”. But no operator may go to this length as it would kill its subscriber strength. Hence, a 20-30% hike looks more likely, say experts.
“Post the 2G auctions, there should be a hike of 30% or more in tariff,” said Sivarama Krishnan, executive director, PwC India. Mahesh Uppal, director of telecom consultancy ComFirst India, said the previous hike of 20% initiated by Airtel last year could be repeated soon. However, Uninor, which stands to lose all its spectrum following the Supreme Court’s order, denied any plans of price hike.