Mobile companies increase tariffs, snip freebies

Mobile service providers have started increasing tariffs and bringing down freebies and discounts with Reliance Communications (RCom) on Wednesday announcing a hike of up to 20 per cent for its pre-paid customers with effect from April 25.

Airtel recently increased rates for both internet services and calls under certain schemes. Vodafone and Idea Cellular have also reduced validity of voucher from 30 days to 24 days.

“Headline tariffs will increase from 1.5 paise to 1.6 paise per second, while tariffs on discounted and promotional plans will increase by up to 20 per cent,” an RCom statement said.

 The company has reduced the total number of minutes for special tariff vouchers of Rs 43, Rs 148 and Rs 259. “At Reliance Communications, we continue to focus on growing profitable/paid minutes on our network and the current tariff hikes are part of our continued efforts to reduce free and discounted minutes, and offset the ever-rising costs of input materials,” RCom chief executive officer (consumer business) Gurdeep Singh said.

 The telecom industry as a whole has been cutting back on freebies and discounted minutes to maintain profitability. Analysts say this trend may continue as they have to pay for the fresh spectrum purchases.

The fresh spectrum purchases at the recent auction were being cited as one of the factors for the latest rise in tariffs. Marten Pieters, the CEO of the country’s second largest service provider Vodafone, recently said that the mobile telecom industry has reached a point where annual tariff hike is needed to sustain itself.

Pieters also said the recent spectrum auction combined with others expected in the next couple of years will worsen the health of the telecom industry at a time when it is yet to recover from the “excesses” of the 2010 auction.