Mobile service providers are in no mood to roll back the recent hike in SMS and call tariffs. In fact, Airtel and Vodafone Essar, will get company.
NEW DELHI: Mobile service providers are in no mood to roll back the recent hike in SMS and call tariffs.
In fact, Bharti Airtel and Vodafone Essar, which set the ball in motion earlier this week, are going to get some company.
This move comes even as the regulator had expressed its readiness to intervene in the matter. Bharti and Vodafone had increased local call charges within their own networks in the Delhi circle, under some tariff plans, from Re 1 to Rs 1.20 per minute.
SMS rates, too, were hiked from Re 1 to Rs 1.20 per message. Now more of their global systems for mobile communications (GSM) cousins are planning similar hikes, under select plans, in other circles as well.
India has a total of 23 telecom circles. Service providers were not available for comments. Cellular Operators Association of India (COAI) director-general TV Ramachandran told DNA Money that “only some operators have hiked rates, under some plans. Customers still have the full choice to select from a variety of tariff plans.”
According to Ramachandran, these are “normal market dynamics”. He indicated that such steps are sometimes necessary in a free market, as operators have to run viable businesses and also have to ensure rollout of networks across the country, including rural and remote areas.”
GSM operators, it is learnt, would present their side of the story to the telecom regulator soon.
Falling tariffs, high churn rate and scarcity of spectrum are their main complaints.
Currently, telecom tariffs are under forbearance. This means that market forces are free to fix call charges.
The Telecom Regulatory Authority of India (Trai) has been continuing with the forbearance regime for the past few years as tariffs have been falling.
Train can intervene in tariff matters, if it so feels, by floating a consultation paper on the issue. It also has the option of issuing directions on reducing charges for premium SMSes.
Trai chairman Nripendra Misra, who’s usually opposed to the idea of stiff penalties for telecom operators unless there’s a serious violation, had recently told this newspaper that the “solution lies in persuading telcos, and not in suspending their licences.”
In any case, industry representatives maintained that telecom tariffs in India are the lowest in the world. In the past 12 months, call charges have dropped in the range of 12-15% on an average in the country, they pointed out.
“So, why just highlight the increase in tariff under select plans by some operators,” the sources argued.
In a recent study, Trai had said that the average revenue per user (ARPU) per month for mobile operators had dropped 6.2%, from Rs 337 in the quarter ending September 2006 to Rs 316 in the quarter ending December 2006.
While the ARPU of GSM operators in the post-paid category had declined 1.7%, from Rs 643 per user per month in September 2006 to Rs 632 in December 2006, in the pre-paid segment, it dropped 5.3% from Rs 277 to Rs 262.
In the code division multiple access (CDMA) services, operators recorded a 8.83% decline in blended ARPU, from Rs 215 in September 2006 to Rs 196 in December 2006. CDMA post-paid ARPU is Rs 456, while that in pre-paid segment is Rs 159.
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