The Telecom Regulatory Authority of India has asked mobile operators to clarify why they have increased tariffs.
Mobile operators including Bharti Airtel, Vodafone Essar, Tata DoCoMO and Reliance Communications had recently hiked tariffs in few plans by up to 20 per cent.
“We have sent letters to all the companies which have recently hiked tariffs seeking justifications for the reasons as to why they have hiked the tariffs and the reasons for the same. The last one has gone to Reliance Communications,” the TRAI Chairman, Mr J.S. Sarma, said on the sidelines of an event.
Industry observers said the telecom regulator may not be able to do much in this regard because the tariff for mobile service is under forbearance, which means that operators are free to fix tariffs.
Most of the operators had said that they were forced to raise tariffs as they are facing pressure on their revenues.
“Telecom is probably the only industry where, despite increasing inflation, tariffs have been falling unabated. Continuously declining margins, high 3G and BWA auction prices, constrained spectrum and rural roll-out aspirations leave us with little choice but to make some price corrections,” Bharti Airtel had said after it increased the tariff. Airtel had raised the tariffs for its ‘Advantage' and 'Freedom' pre-paid tariff packages.
Users of the Advantage plan now pay 60 paise instead of 50 paise per minute for local and STD calls and 90 paise for calls to landlines. In addition, subscribers are charged Re 1 and Rs 1.50 for local and national SMS, respectively.
Tata Teleservices, which had ushered in a tariff war with its per-second billing-based GSM offering two years ago, has revised the rates for all new subscribers of Tata DoCoMo in every circle it operates.
According to a Credit Suisse report, Tata DoCoMo has raised local SMS tariffs by 67 per cent to Re 1 an SMS (from 60 paise earlier) for local SMS and by 25 per cent for national SMS to Rs 1.50 (from Rs 1.20). STD call tariffs will be doubled to two paise a second from the second year of subscription.
Further hikes likely
According to analysts at PwC, if industry fundamentals stay poor, further tariff hikes could be on the cards. While this will help operators protect margins to some extent, the party for telecom consumers seems to be over for now