Telcos charge new users hiked rates

Leading telecom operators, such as Bharti Airtel, Vodafone Essar and Idea Cellular have ignored regulations put in place by the Telecom Regulatory Authority of India (Trai) that shield new subscribers from changes in base call rates for about six months.

The operators, who have increased their pre-paid tariff by 20 per cent in some circles, are charging the new subscribers also according to these rates. This goes against Trai rules.

Under these rules, a person who has taken a connection even a day before new tariffs have come into force would continue to pay according to the old rates for six months as operators are not supposed to change base call tariffs for 180 days, said a top telecom official. The operators' move to charge new subscribers according to the changed rates highlights their highhandedness and brings to light Trai's ineffectiveness in protecting the interests of consumers. Trai chairman R.S. Sarma could not be reached for comment.

There are indications that operators will not offer new customers the option of a per-second billing plan. However, telecom operators have not commented on this development. Bharti Airtel, Vodafone Essar and Idea Cellular have a combined share of around 60 per cent of the total mobile subscribers in the country, which amounts to around 80 crore subscribers. As these operators have already added more than 50 lakh subscribers this year, such flouting of rules deprives subscribers as a whole of a lot of money.

A top official at Vodafone Essar confirmed that all subscribers - new and old - are being charged according to the new rates. New customers of Bharti Airtel will be charged the new rates when they recharge. "With the recharge, he gets new rates," said the Bharti Airtel spokesperson.

Vodafone has increased tariffs in the Delhi, Gujarat and Andhra Pradesh circles. Reports said that it has also done so in nine more circles. Bharti Airtel, which hiked prepaid call rates in five circles last Friday, has made similar hikes in eight more circles.

Idea Cellular has hiked pre-paid call rates in Uttar Pradesh east and west, Gujarat, Haryana, Rajasthan, Maharashtra, Goa and Kerala. The new operators have, however, decided not to join the tariff war. "Subscribers are price-sensitive. We will wait and see how the subscribers react to the call rate hikes.

Leading operators have made heavy investments and have to make up for these expenses. Bharti Airtel has to recover a lot of the expenses they have made for their Africa and Bangladesh operations. But we have no such pressure at present," said an official working for a new telecom operator.

An official of a relatively new operator said that smaller players who are competing against established brands will have to remain very attractive to customers. India is the world's second-largest mobile market after China. In the past few years, it witnessed a cutthroat tariff war that led to the boom in the sector and resulted in one of the lowest call rates in the world.

The cut in tariffs dented the profitability of most mobile phone companies in the 15-player market but also saw the sector add more than 400 million customers in the past two-three years.

Bharti Airtel had cited declining margins and high 3G and Broadband Wireless Access (BWA) spectrum auction prices as the reasons for hiking tariffs. Bharti had more than 167 million subscribers as of May this year, while Vodafone and Idea had 139 million and 93 million users, respectively, according to Trai data.

"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," it had said.