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Indian Teleservices To Cut Talktime and Reduce Offers To Boost Margins

Bangalore: Over 96 percent of India’s mobile population is going to pay more as the leading telecom companies including Vodafone, Bharti Airtel, Idea Cellular, Tata and Aircel are taking bold steps to increase their sales and margins in this fierce and competitive sector. As a first step, they have started slashing talk time on prepaid discount vouchers, whose sales account for nearly 70 percent of the revenues.

The companies are also cutting the freebies provided with some special tariff vouchers and with the new measures, they are planning to increase the revenue which has been stagnated over the past three years.

The earlier strategy of raising call rates in selected circles and gradually spreading it to whole country is not used this time. According to Economic Times, the companies have slightly tweaked the plans of discount vouchers over last two weeks, some cutting the number of days from validity vouchers while others raising the price of special vouchers.

According to analysts, such small changes could result in 'meaningful impact' on reported revenue per minute. "For subscribers using these discount plans, these changes could have the impact of increasing the RPMs by 8-13%," said Sunil Tirumalai, Credit Suisse research analyst to Times of India.

According to Sanjay Kapoor, Bharti Airtel CEO or india, who spoke to ET, “falling margins due to intense competition had impacted its profits, and the company would have to increase tariffs to sustain operations. The present model is not sustainable. But we can't be the only ones raising tariffs - this has to be an industry decision."

So customers, be ready to shed some extra money for your monthly communication expenses.

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