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Reliance Communications increases call tariffs by 20%

Anil Ambani Group firm Reliance Communications has increased call charges by 20% for both GSM and CDMA services in most of its operating circles.

india Updated: Aug 14, 2011 17:53 IST

Anil Ambani Group firm Reliance Communications has increased call charges by 20% for both GSM and CDMA services in most of its operating circles.

"We have increased tariffs in most of the circles over last couple of months in a phased manner, from 1 paisa to 1.2 paise per second," Syed Safawi, the head of RCom's wireless business, told PTI in an interaction.

RCom said the hike in tariffs is due to inflationary pressure in the country.

In case of GSM services, the hike has been for calls made within Reliance's network and on other networks. For CDMA services, the hike is only for calls made to the network of other telecom companies, Safawi said.

However, he neither disclosed details of the circles where tariffs have been increased, nor the timeframe within which the company will raise tariffs in all circles.

Recently, it was learnt that major telecom players, namely Bharti airtel, Vodafone and Idea Cellular, increased their tariffs by a minimum of 20%.

RCom had earlier outlined its strategy to enable optimum monetisation of airtime on its network. The company at the end of the 2010-11 financial year had announced its exit from minute-based mobile phone billing schemes, under which it offered schemes like unlimited free minutes for fixed charges.

"Now we are looking for quality customers who give us revenue. We have seen an increase in minutes of usage and improvement in EBIDTA," Safawi said.

RCom on Saturday reported a 37.2% dip in consolidated net profit to Rs 157 crore for the first quarter ended June 30.

RCom had posted a Rs 250 crore profit for the same period in 2010-11. The company attributed the decline in profit to additional tax outgo.

"The net profit after tax is lower due to the positive tax impact of Rs 70 crore in Q1 last year. Before tax, net profit is Rs 220 crore, versus Rs 228 crore last year," Safawi said.

RCom's net income from operations during April-June, 2011-12, was also down 4.3% to Rs 4,849 crore from Rs 5,069 crore in Q1 of FY'11, the company said.

Safawi said the decline in revenue is due to changes in RCom's accounting policy.

"Total revenue is showing negative due to the first time revenue impact in last quarter of the IRU accounting changes in the global business," he said.

RCom said during the quarter, the company paid back a loan of USD 500 million raised through foreign bonds. It added that it is ready to pay off its future debts as they mature, including redemption of Foreign Currency Convertible Bonds worth USD 1 billion due in March, 2012.

As per Telecom Regulatory Authority of India data, RCom added 2.10 million new subscribers in June, taking its user base to 143.26 million.