Phone bills to rise
It was a big shock for Vinay Tyagi, a Delhi-based executive, when he recently recharged his prepaid mobile phone. He got only 86 minutes of talk time on a recharge of Rs 100 instead of 100 minutes that he used to get earlier. Manoj Gairola reports. Why you will pay moreindia Updated: May 29, 2013 01:51 IST
It was a big shock for Vinay Tyagi, a Delhi-based executive, when he recently recharged his prepaid mobile phone. He got only 86 minutes of talk time on a recharge of Rs 100 instead of 100 minutes that he used to get earlier.
His first reaction: he wanted to move to another telecom company but found most of them charging similar rates.
“This is the first time that I have seen an increase in call charges since I started using a mobile phone 10 years ago,” said Tyagi.In January this year, some leading telecom operators started withdrawing discounts for prepaid customers. Most had introduced discounts — of up to 20-25% —between 2008 and 2012 when new operators began launching their services in various parts of the country.
Following a Supreme Court order in February last year canceling some new licenses, two operators, Etisalat DB and S Tel, stopped providing services, while three others — Videocon, Telenor and Sistema Shyam TeleServices — curtailed their services.
“Reduction of discounts and promotional offers is a part of our ongoing strategy,” said a spokesperson of Bharti Airtel, India’s largest telecom service provider.
Vodafone, India’s second-largest mobile phone company, refused to comment for this report.
“We are beginning to see a phase of consolidation in the industry now, with smaller players either closing down or scaling back operations. With this, pricing power is moving back to long-term and serious operators,” said Gurdeep Singh, president & CEO Wireless, Reliance Communications, India’s third-largest telecom operator.
Shorn of jargon, this means your bills are likely to rise.
Then, tariffs may rise further if telecom companies have to pay high prices for spectrum (the airwaves on which telecom voice and data are transmitted) at the next auction.
The existing licenses, which carry with them the right to use spectrum, will expire in 2014. The auction is due this year and the government will soon decide the reserve price.
“Tariffs may go up if operators buy spectrum at high reserve price in the forthcoming auction,” said Rajan Mathews, director general of Cellular Operators Association of India, which represents 75% of the Indian telecom industry.