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Mobile tariffs, handset prices to go down

13-May-2004
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Mobile tariffs, handset prices to go down

If you are planning to buy a new mobile, wait a while. The mobile phone tariffs as well as the prices of mobile handsets — believed to be already touching the bottom — are set to go down further.

Taking note of the falling growth in subscriber numbers in the last few months, the Telecom Regulatory Authority of India (Trai) has decided to take measures to push for higher subscriber growth. Sources close to the regulator told FE that the further cut in mobile tariffs and handset prices are seen as some of the major accelerators to boost subscriber growth by the regulator.

However, mobile operators may also gain in the process as the regulator is also considering recommeding sops in terms of reduced duty on capital equipment, redefining adjusted gross revenues, converting access deficit charge to revenue-linked fee and allowing sharing of infrastructure. “The regulator may ask operators to pass on the benefits by reducing tariffs,” an industry insider said.

Though Trai member D P S Seth declined to comment on the move to bring down tariffs, he confirmed that the regulator had taken note of falling growth in subscribers and would soon be announcing some measures. “We have decided that the mobile service industry needs another round of review of policy to boost the growth of subscribers. Trai has already initiated the discussions with operators and will make its recommendations soon,” he said, suggesting that the oparators may also be given some incentives. “There is a demand in many areas but services have not reached there. We will have to encourage these operators to enter in such areas,” he added.

The mobile subscribers (including GSM and CDMA) have been growing by 1.9 million per month in Novemeber and December last year but the growth came down to 1.64 million in January and Februray. Though March has witnessed 1.91 million additions due to year-end targets, subscribers grew only by 1.35 lakh in April confirming the declining trend.

Cellular Operators Association of India (COAI) director general T V Ramachandran also confirmed that the association has made a presentation to the regulator for boosting growth of mobile subscribers.

“We have made three points: bring down the cost of capital equipment so that operators can go to deeper areas; make mobile handsets more affordable to lower the entry barrier and all infrastructure sharing with incumbent operators like BSNL to reduce the cost of operations,” he said.

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