In what could be early signals of an increase in mobile phone tariffs, some new telecom operators have quietly tinkered with the charges for voice calls and text messages.

Tata TeleServices, which had ushered in a tariff war with its per-second billing-based GSM offering two years back, has revised the rates for all new subscribers of Tata DoCoMo in every circle it operates.

According to a Credit Suisse report, Tata DoCoMo has raised local SMS tariffs by 67 per cent to Re 1 an SMS (from 60 paise earlier) for local SMS and by 25 per cent for national SMS to Rs 1.50 (from Rs 1.20). STD call tariffs will be doubled to two paise a second from the second year of subscription.

Analysts feel it is just a matter of time before the other telecom operators follow suit. “Well-entrenched vendors will seize this opportunity to raise tariffs, especially when it comes to national calls. This move by Tata Tele will enable them to take tariffs to a level at which they are comfortable operating,” said Mr Rishi Maheshwari, Vice-President, Research, Enam Asset Management. 

While operators, including Vodafone, Bharti Airtel and Reliance Communications, did not offer comments on their pricing strategy, these companies have in the past said the tariffs are not sustainable. At one paise a second (for voice calls), base tariffs in India are the lowest in the world.

A spokesperson for Tata TeleServices said the rationalisation in SMS tariffs is ‘in line with the market and applicable to all new subscribers'. “For us, ‘Pay Per Use' goes beyond any single sliver of usage and continues to be the central tent-pole of our consumer commitment… Our tariff offering, hence, will continue to be without conditions on our pay per use platform — the specific rates could change appropriately and in response to market conditions,” the spokesperson said in a written response to a Business Line questionnaire.

However, officials at some of the new telecom operators feel that call rates could go down further if there are regulatory changes. “There is still room for national long-distance, international long-distance and roaming charges to go down if interconnect usage charges are rationalised… It is now up to the Government to take a call,” a senior official said.

(This article was published on June 30, 2011)
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