Bharti Airtel, the country’s largest telecom operator, on Friday increased tariffs by 20 per cent for prepaid subscribers in six circles, including Delhi, Kerala and Gujarat.
This, said analysts, signalled an end to rock-bottom mobile tariffs, which led to scorching growth in subscriber numbers over the last few years.
Bharti is the second private telecom company to increase call rates recently after Tata Docomo, which raised tariffs in one-two circles two months ago. The move will enable companies to increase revenue amid falling margins and profits.
The finances of telecom companies are under severe pressure due to the huge debt taken for buying 3G and broadband wireless access (BWA) spectrum last year.
“Telecom is probably the only industry where despite increasing inflation, tariffs have been falling. Continuously declining margins, high 3G and BWA prices, constrained spectrum and rural rollout aspirations leave us with little choice but to make some price corrections,” said Bharti Airtel.
Other operators are expected to follow. Ernst & Young analyst Akshay Grover said, “Operators have no choice except to increase tariffs. They have tried to cut costs, but it cannot be sustained beyond a point.”
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Bharti has increased call rates in two prepaid plans — Advantage and Freedom — for calls and messages within its own network. The Advantage plan subscribers will have to pay 60 paise per minute as against 50 paise per minute earlier. However, the rates for calls to other networks have not been changed. The circles where Bharti has increased prices are Delhi, Rajasthan, Gujarat, Andhra Pradesh, Kerala and Madhya Pradesh.
For the Freedom plan, the tariff has been revised from 1 paisa per second to 1.2 paisa per second. Here also, the rates for off-network calls have not been changed. Customers not opting for Advantage and Freedom packs will have to pay the old rates of Rs 1 for local and Rs 1.5 for STD calls.
Vodafone Essar refused to talk about any move to increase tariffs. “As a policy, we do not comment on commercials and tariffs,” said a company spokesperson.
Tata Docomo had started charging 1 paisa per 3 seconds from 1 paisa per 6 seconds earlier. It increased local SMS charges by 66 per cent.
The new player, Unitech Wireless, which offers services under the Uninor brand, said, “As a smaller player competing against established brands, Uninor will have to remain very attractive to its trade and customers. However, we will watch this move by the industry leader carefully to see the changes on the ground. We will support rationality in the industry in a manner that mobile services continue to remain affordable for customers.”