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.