The golden age for Indian mobile telephony subscribers may be over soon with incumbent telecom operators are likely to increase tariffs.
Cellular operators have written to the Telecom Regulatory Authority of India (TRAI) that if roaming is made free for consumers, their revenues will go down by about 9% and they will have to compensate by increasing tariffs.
In the last few weeks, Airtel has reduced various discounts for prepaid customers, making services costlier by up to 25%. This has impacted nearly half of prepaid customers.
Communications and IT minister Kapil Sibal has announced free roaming policy by the end of the current fiscal year. At present, a subscriber has to pay R1 per minute for roaming.
The Cellular Operators Association of India (COAI), which mainly represents interests of three incumbent operators Airtel, Viodafone and Idea, has written to TRAI that operators will have to increase tariff if free roaming is implemented.
"Mobile operators get around 9% of their revenues from roaming charges and with the introduction of free roaming these revenue streams will be hit," COAI wrote to TRAI in response to a pre consultation paper on roaming tariff. "Operators will be left with no choice but to re-balance, increase tariffs, which will impact all subscribers, especially the subscribers in the rural areas."
Airtel has already increased call charges by reducing discounts.
For example, a subscriber had to buy a recharge voucher of a minimum of Rs. 30 to avail full talk time. Now, this threshold has been increased to between Rs. 50 and Rs. 60. Similarly, talk time in special value vouchers of Rs. 22 has been reduced from 50 minutes to 40 minutes. The validity period of a Rs. 45 voucher has been reduced from 14 to 10 days.
According to estimates, discount coupon users account for about 50% of the prepaid traffic of big service providers.