Competition squeeze puts telecom players on the backfoot, tariffs slashed

It’s been a bonanza time for mobile phone users as fierce competition has seen all the major service providers in India like Airtel, Vodafone, Reliance, BSNL, Spice, Tata Indicom, and even the recently launched Virgin Mobile, slash tariff rates or offer attractive schemes. exchange4media takes a look at the market trends.

e4m by exchange4media Staff
Updated: Jun 13, 2008 7:59 AM
Competition squeeze puts telecom players on the backfoot, tariffs slashed

Fierce competition in the access segment (mobile) of the national network has resulted in a dramatic reduction in tariffs, which in turn has benefited the customer. The cellular telephony segment has emerged as the fastest growing segment in the Indian telecom industry. The drop in tariff rates is helping in creating an India without boundaries, and making communication easier and more affordable.

Bharti Airtel could be said to have started the trend when it reduced its STD rates on April 30, 2008 to Rs 1.50 per minute from the earlier Re 2.65 per minute. Airtel has also redefined the roaming regime in the country. Airtel customers can now receive a call while roaming at Re 1 per minute, as compared to the earlier Rs 1.75 per minute. Further, Airtel now allows an outgoing local call at Re 1 per minute.

Sanjay Kapoor, President, Mobile Services, Bharti Airtel, said, “This initiative spells the end of distance for our existing and prospective customers. With 70 per cent STD customers in India using less than five minutes per month on STD calls and 80 per cent mobile customers not using their phones while roaming, we have a compelling customer proposition. I am delighted that we led this endeavour, which strengthens our strategic plank of affordability. I am confident that this will drive growth and usage in the Indian telecom industry.”

Harit Nagpal, Director, Marketing and New Business, Vodafone, said, “We at Vodafone are addressing the customer need more than following the tariff drop trend. Vodafone slashed their tariff early last month with roaming charges dropping to Rs 1.30 and calls at Re 1 per minute for local as well as STD.”

In line with the current scenario of tariff reduction, Bharat Sanchar Nigam Ltd (BSNL), too, announced revised tariff on June 9, 2008. Kuldeep Goyal, CMD, BSNL, claimed, “We are offering the lowest STD rates at Rs 1.20 per minute with effect from June 10, 2008. In fact, for some rural customers, the rates have dropped to a low of 80 paise per minute. The current STD rate is Rs 2.40 per minute. The scheme is applicable to pre-paid as well as post-paid customers. Lifetime schemes, however, would attract a tariff of Rs 1.50 per minute.”

SP Shukla, President, Reliance Communications, said, “Reliance has always symbolised affordability in the telecom history of the country. Growth rates will clearly bear out the difference in telecom penetration in the country before and after the service was launched by Reliance. Our significant investments enable us to create massive capacity, thereby facilitating customer centric price benefits.”

Vineet Bhatia, COO Delhi and NCR, Tata Teleservices, said, “Customers are always at the focal point for the company and whenever we launch new tariff offers, it is just not for customer acquisition, but also designed keeping in mind the current customer spend and their growing needs.”

Bhatia further said, “Our tariff plans have been designed to cater to one and all without bundling any add-ons. Each plan has its uniqueness, and depending on the usage and spend, the customer can now choose his plan among the bouquet of options available.”

Tata Indicom Plan 150 at an effective rental of Rs 100 allows customers to make STD and local calls along with sending SMSes anywhere at 90 paise per minute, whereas on Tata Indicom Plan 275, customers can make STD and local calls along with sending SMSes at 50 paise per minute to any number across India.

Spice Telecom, too, slashed its tariffs for STD calls as well tariffs for calls during roaming mode. STD calls would now be charged Rs 1.30 per minute, while incoming and outgoing roaming calls would be charged Re 1 per minute. STD calls while on roaming would be charged Rs 1.50 per minute.

The only underlying aspect with Spice’s offer to its subscribers is that the subscribers would have to opt for these tariff reduction plans. These would not be applicable by default as offered by other service providers.

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