Mobile tariffs likely to move north

Mobile tariffs are likely to move up as telecom companies may do away with the freebies offered to their consumers.

Yesterday, top telecom operator Bharti Airtel indicated of a rise in tariffs, saying
"there might be ups and downs in certain quarters, but the long-term secular opportunity for raising voice realisation remains, given the significant gap between headline tariff and the realised rates or in other words discounted tariffs."

Currently, headline tariffs stands at Rs 1.2 per minute, whereas the net revenue earned by the industry is as low as 44-45 paise.

In an interview with a publication, Telecom Regulatory Authority of India chairman Rahul Khullar also mentioned about a possible call rates rise by 8-9% over the year.

He also said that the government should hasten the opening up of spectrum for high-speed access and that the new M&A norms were too stringent and would inhibit much-needed consolidation in telecom.

He warned that any move to increase headline tariffs won't go down too well. "What we don't expect is a rise in the headline tariffs. In case there is a rise in the headline tariffs, the authority will surely look into the matter and, depending upon the case, might intervene," the chairman said.

Though companies like Bharti Airtel and Idea Cellular have performed well in the first quarter results but on the back of low cost realization and high spectrum prices they may hike rates.

Bharti Airtel recorded an improvement in the domestic mobile business which led to a top line growth of 3.3% QoQ .

Earlier, Vodafone MD Martin Pieters had said: “We have had declining tariffs for 18 years; this cannot be sustained forever. We believe the point has come where we will have to increase our tariffs every year, depending on cost levels.”

Bharti Airtel, Vodafone and Idea Cellular, the three biggest mobile service providers in the country, and Reliance Jio were among eight companies that bid a combined Rs 61,162 crore for spectrum in the 900 MHz and 1800 MHz bands offered by the government during a 10-day auction that ended on February 13.

The country’s mobile subscriber base is currently 88.1 crore, according to TRAI.

Even Cellular Operators Association of India Director General Rajan S Mathews had said: “There certainly would be upward pressure on data tariffs and discounted minutes would be reduced.”