NEW DELHI, India-Indian cellular companies slashed mobile-to-mobile national long-distance tariffs by nearly one-third, in an obvious response to low tariff rates announced by Reliance, a leading limited mobility operator.
The “one rate tariff” of 2.99 rupees (US$0.06) per minute for all mobile-to-mobile calls will replace the existing peak/off-peak hour and distance-based long-distance tariff structures and will be implemented by 10 private leading operators. Government-owned companies BSNL and MTNL also may follow suit.
“We can not allow our market share to be churned away while a final decision is taken on limited mobility by the telecom disputes tribunal, due to the lack of an uneven playing field vis-a-vis limited mobility operators,” said T V Ramachandran, industry spokesperson, after a meeting of all the operators.
About 10 percent to 12 percent of the revenue of cellular operators comes from domestic long-distance, and the new tariff would mean a loss of 6 billion rupees (US$125 million) per month. The mobile-to-mobile long-distance traffic is estimated to be 100 million minutes per month.
“We are prepared to bear this loss, in addition to the huge accumulated losses due to high revenue share and other factors, to retain our market share,” Ramachandran said.
Communications Minister Pramod Mahajan, who was invited by the operators to make the announcement, said, “With today’s reduction, mobile-to-mobile long-distance becomes cheaper than long-distance over fixed line.”
GSM players said they hope to announce more concessions this month, being seen as an obvious bait to customers planning to subscribe to the wireless local loop service of Reliance, which has started booking for its national CDMA launch in April.
The cellular subscriber base in India reached the 10 million mark in December. Industry leaders project the number to be 25 million by the end of 2003.
