As a precursor to hike in call tariffs, telecom service providers have started doing away with freebies to keep costs under control, and are mulling over increasing call charges in the near future.
Bhatri Airtel and Idea Cellular have already withdrawn several promotional offers that would ultimately increase their revenue collection. Other players are likely to follow.
Denying that call tariff has been increased Bharti Airtel said, “There is no change in the headline tariff. In most circles, we have reduced promotional benefits and free minutes on both acquisition and existing usage.”
“We are committed to enhance value for our customers through continued investments in network, technology, customer experience and life enriching services,” an Airtel spokesperson said.
Despite several attempts, the officials concerned of Idea Cellular could not be reached for comment. But according to information, the company has increased call tariffs in some circles and has done away with the offers of enhanced talk time given in packages.
“We welcome the price rationalisation for bonus cards, special tariff vouchers and free minutes from our competitors. We feel these were inevitable given the sharp input and energy price increases. We are studying these moves individually across all our circles.
“We are inclined to follow to maintain consistency and competitive position though we have not decided on our precise circle-wise moves,” Vodafone India said in a statement.
“Operators have to account for the increased costs of spectrum sale last month and another auction coming up in March. Capping free minutes as well as call vouchers is essentially working around the benefits extended to consumers but understandably call prices will also go up in a phased manner if the industry has to keep sustainable service delivery.
“We expect that other industry players too will be taking the same route in due course,” said Sivarama Krishnan, Executive Director, PwC India.
“The tariff increases do not indicate any significant volume elasticity, and have resulted in a net revenue accretion which augurs well for the telecom industry,” said Rikesh Parikh, Vice-President (markets strategy & equities), Motilal Oswal Securities.
This could be a negative for consumers but telecom stocks gained on the stock exchanges on Wednesday. Bharti Aittel closed with a gain of 4.44 per cent at Rs.367.25; Idea Cellular (up 0.72 per cent) at Rs.118.50; RCom (up 0.63 per cent) at Rs.88.10 and Tata Teleservices (up 3.09 per cent) at Rs.12.66.