In After offering low tariffs for few years, Bharti Airtel has announced 20% to 50% increase in the tariff rates of certain popular pre-paid in some parts of the country. According to sources, Airtel plans to extend the increase in tariffs to other parts of the country, and other major players in the GSM space, Vodafone Essar and Idea Cellular are expected to follow suit. However, the price rise move puts the new entrants in the telecom space at a disadvantage. They will not be able to increase tariffs, because of the fears of that their low user base will take advantage of the MNP scheme and flock to the established players.
The six sectors where Bharti has increased its local and long distance call rates include Delhi, Andhra Pradesh, Kerala, Rajasthan, Madhya Pradesh and Gujarat. The savage price war that has been raging for the last two to three years had resulted in rock bottom tariffs. Indian users were enjoying lowest tariffs in the world. But the tariff war also had an impact on the profitability of the telecom companies. The revenues became stagnant for the last two years, despite the fact that the sector had roped in 400 million more users during the same period.
A couple off weeks earlier, Tata TeleServices had doubled STD call charges for new subscribers after a year of connection and raised local and national SMS charges by 67% and 25% respectively. The telecom operators claim that they have little alternative except raising tariffs. They are also blaming all around inflation for rise in tariffs.
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