Airtel to slash discounts, raise tariffs to cut costs
India's largest telecom operator, Bharti Airtel, on Wednesday said it will continue to cut discounted minutes and raise its voice and data tariffs to meet rising costs and improve revenues.business Updated: Apr 30, 2014 23:35 IST
India's largest telecom operator, Bharti Airtel, on Wednesday said it will continue to cut discounted minutes and raise its voice and data tariffs to meet rising costs and improve revenues.
"We are in a brutally competitive market… discount tariffs will have to go for improving the financials," said Gopal Vittal, MD and chief executive officer, India and South Asia.
The company's strategy over the last few months has been to cut down on discounted tariffs and promotional packages. It has also increased mobile services rates of both Internet and voice calls under certain schemes.
The Sunil Mittal-led company has been trying to improve the revenue from voice realisation for the last four quarters. "The current cost of running voice are not sustainable as input costs have gone up," said Vittal.
Inputs costs for calls made and received by subscribers include the cost of diesel to run the equipment at base stations connected by telecom towers, the cost of spectrum, fiber and rolling up networks. "At this rate, voice realisation costs will raise," he added.
According to Vittal, the incoming and outgoing (call) minutes, and cost of international roaming form part of voice tariff. The company has hitherto avoided raising headline tariff, but indicated that in future it will have to raise them too.
The company on Tuesday reported an 89% year-on-year rise in net profit to Rs 962 crore during the quarter ended March 31, 2014 mainly on account of higher revenue from data business and rise in mobile services rates.