Reliance Communications, the country’s second largest telecom service provider, on Tuesday said the price war in the sector is likely to intensify in months ahead and the pressure on operators to reduce call charges will continue to be there for a few more quarters.
“There are two-three greenfield operators who are likely to enter the Mumbai market which may further intensify the tariff war. We are always competitive in all respects and we will continue that,” said Reliance Communications’ president Mahesh Prasad.
Call rates in India are among the cheapest in the world at one paise a second or even less as new entrants are coming out with attractive offers to woo customers in an already competitive market. At present, there are 15 operators in the country with at least 10 in each circle.
“A tariff war is there in the industry for the last three to four quarters and it will continue for a few more quarters,” Mr. Prasad said.
However, he admitted that the new lows in tariffs had put pressure on the earnings margins of players.
“The price war will always put pressure on profit margins. But we are always conscious not to hurt the interest of the company and stakeholders,” he said.
At the same time, aspects like good network, customer care service and value-added services were also essential to win customer confidence, Mr. Prasad said.