Move expected to trigger another price war in roaming charges.
In a move widely expected to start a new war on roaming rates, leading mobile service provider Bharti Airtel slashed on Friday its charges for this by 60 per cent.
Under the new plan, called ‘Airtel Turbo’, subscribers would be billed 60p per minute for all incoming calls on roaming, while outgoing calls would cost 60p/minute on the same network and 80 p/minute outside the network. Airtel pre-paid mobile customers wishing to avail this benefit would be charged Rs 98, which would give an incoming validity of one year, while post-paid users can subscribe to a monthly rental plan.
In September, Bharti — with over 115 million subscribers and holding 23 per cent market share — had reduced call charges within its own network to 50p a minute, followed by a per-second billing plan in October.
Bharti’s latest roaming rates are still about 10 per cent higher than a plan by RCom, which charges its subscribers a flat 50p per minute on roaming, according to an analyst who did not want to be named. The analyst said it would have little impact on revenues, as roaming rates have very high margins.
According to a report by research company B&K, roaming contributes 8.3 per cent to overall wireless revenues and if all of Bharti’s subscribers opt for the latest plan, it would lead to a reduction of 1.7 per cent in its wireless revenues and of 1.4 per cent in consolidated revenues. The report added that the competition and rate war would intensify in the coming term.
“Recent research has shown that customers need benefits while travelling and are not satisfied with just local calling benefits,” Bharti Airtel President (Mobile Services) Atul Bindal said in a statement.
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Bharti Airtel’s stock closed 1.4 per cent down at Rs 288.75 at the close of Friday’s trade on the Bombay Stock Exchange after the announcement.
Four new companies — Uninor, Etisalat DB, Datacom and STel — are likely to launch their mobile operations this year, adding to the existing 11 operators.
The Indian telecom industry is already witnessing a rate war due to the recent trend of offering per-second billing plans, first started by Tata Teleservices. This had forced other mobile players to follow suit. The new strategy worked for Tata Teleservices as, on the back of its per-second billing plan, it added the highest number of new subscribers in the month of October, the third such monthly rise in a row.