Airtel and Idea increase voice call tariffs to cover costs: Report

By Kul Bhushan | Published on 23 Jan 2013
HIGHLIGHTS
  • As expected, the telecom operators are now looking to pass the burden of inflated costs on to the customers. Airtel and Idea have raised their voice call tariffs, others are likely to follow suit soon.

Airtel and Idea increase voice call tariffs to cover costs: Report

Bharti Airtel and Idea Cellular have increased their voice call tariffs as the telecom companies look to cover the inflated costs.

According to a Reuters report, the hike in tariffs come as the telecom operators face “billions of dollars in airwave surcharges” after the Indian government decided to revamp the spectrum allotment procedures following cancellation of 122 telecom licences issued under a scam-tainted 2008 sale.

The report quotes a source privy to the matter as saying that the Airtel had slashed free minutes by up to a quarter and hiked prices of some call vouchers for pre-paid customers by Rs. 5-15. Idea Cellular has raised voice call prices in some parts of the country after pulling several offers and freebies.

Airtel had recently hiked its 2G tariffs to cover costs and improve margins. Other telecom operators had also followed suit by raising tariffs.

Sector analyst at Nirmal Bang Equities Pvt. Ltd Harit Shah reiterates the notion the telecom operators are passing on the burden on subscribers to meet costs. "Part of the tariff hike is driven by cost pressures and also it is sort of a pre-emptive move in order to improve financials because we have got a major auction coming up," Shah is quoted as saying.

The analyst believes moderate hikes could have an impact on call volumes. "India being a price-sensitive market, I don't think you should assume no impact on usage,” he added.

The report notes voice calls contribute about 85 percent of the industry revenue whereas mobile data is yet to peak. However, call rates in the country are among the lowest in the world, squeezing margins for the operators. In the near future, we are likely to see other telecom operators to follow suit and raise tariffs.

Source: Reuters

Also read,

CDMA spectrum auction may fetch more than Rs. 9,500 crore revenue
Cabinet approves 50 percent cut in CDMA spectrum base price
BSNL walks away from the next round of spectrum auction: Report
 

Tags:
4g 3g airtel bharti airtel lte vodafone 2g idea cellular idea 4g lte airtel voice call tariffs telecom operators voice call tariffs infrastructure costs licence fee idea cellular voice call price airtel hikes call prices airtel data plans airtel voice cal
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