The telecom sector seems to be in serious trouble and the brewing trouble is not the repercussion of either scams or corrupt officials, which at one point though threatened to topple the whole industry.
Surprisingly, it is because of the over-crowding of players in the industry and the stiff competition between them to rule the market.
In 2003, when Reliance launched mobile services which made calls rates as low as 40 paisa per minute, it fulfilled Dhirubai Ambani’s dream to make a phone call cheaper than the more popular postcards.
But the philanthropic act ended up having negative impact as it coughed up a pricing war which is yet to see its end. Now The of Renewal of license coming into effect in few months, most of the operator’s are gearing up for the renewal so they don’t end up in losing customers.
Lets see how these major operators started getting the customer base,When Tata Docomo introduced Charging on per second basis, Chotta recharges which Airtel Campaigned, free roaming charges firstly launched by Tata Indicom, life-time validities with handsets ,Introduced by Reliance , getting paid for incoming launched by Virgin ,are some of the marketing ideas that have been adopted by the operators.
The others do not have a choice but to join in the fray. It is definitely benefiting the consumers a lot but for the operators it’s a mere a dreams to make profit out of this, it means a serious downside of profits – something they might not be able to cope with for too long.
With the new operators emerging to capture their slice of pie in the market, the competition has spiraled out of control. This has brought down the Average Revenue per Users (ARPUs) which is posing serious concerns to the market players.
So what is your take do you think will there be an end to it or its going to continue let us know via comments.
rajiev May 1, 2011 at 9:44 am
how cheer network in delhi any idea?
Mubarak April 30, 2011 at 9:26 pm
I don’t thnk the operator r strugling wit low tariffs.. Bcoz india is huge markt & starge people(customer)..look tatadocomo who launchd per sec biling in tn telecom circle.. But now check d numbr of customr for thm.. It s realy low..
Sudhakar April 30, 2011 at 5:01 pm
Hey Rajesh,
Do not talk foolish. Do not curse the youngsters alone. It depends on the 6th sense of a human whether to USE or MISUSE the technology.
So do not blame the operators blindly. Ok?.
velu April 30, 2011 at 4:00 pm
No arjun Airtel has good network in TN. i am using for morethan 5 years. No problem with them. Even they have a tower per 2 or 3 km in rural area
AMKE April 30, 2011 at 3:16 pm
@pavan
In delhi two operator providing lifetime lower tariff. 1.State run MTNL Providing 1p/sec loc & std tariff on new 3G sim for lifetime. And 2.CHEERS Providing 40p. loc & 60p. std for liftime.
Manish April 30, 2011 at 12:11 pm
@DEEPAK
60p/min
Arjun Chandrashekar April 30, 2011 at 11:47 am
@Joy
Whom Told That AirTel Is Worst in Most of The B and C Graded Circles, In Few of The B Graded Circles AirTel Has Worst Coverage Also in The A Graded Circles Like Tamilnadu and Maharashtra AirTel is Having Worst Coverage. And Do You Know in Karnataka, AirTel is Not Having Good Coverage Like Idea Cellular. So Pls Kindly Look into This Matter and Comment Properly.
DEEPAK April 30, 2011 at 11:26 am
what is airtel charging now in roaming?
rajiev April 30, 2011 at 11:20 am
agreed
DEEPAK April 30, 2011 at 11:20 am
incoming Rs 1 and outgoing 1.5
RAJESH April 30, 2011 at 11:11 am
BEING A RETAILER I WOULD SUGGEST THE CALL RATES TO BE HIKED KEEPING TEENAGERS IN MIND BCOZ LIMIT OF MOBILE USER BEING EARING PERSON THEN HOUSE WIFES THEN OLD AGED THEM COLLEGE THEN HIGH SCHOOL NOW REACHED TO PRIMARY TOO
WHERE THE TECHNOLOGY IS SPOILING THE YOUNGSTERS IN MANY WAYS CHATTING TO UNKNOWN PERSONS EAGER TO MEET THEM IN LONELY PLACE CRODDING THERE LIMITS THEN PROBLEM STARTS?????????????
Joy April 30, 2011 at 10:50 am
Agreed with you sir.. The problem is not telcos but the regulatory authorities who govern them.. These guys (TRAI & DOT) are busy in favoring a company or in criticizing each others recommendations to Govt. Of India. They have no interest in common people’s problems . The basic problem every user faces is unwanted VAS activation, telcos Quality Of Service (QOS) differs from place to place. For e.g. AirTel has best services in Metros & A Circles whereas in B & C circles it is the worst operator. The lowering of tariffs has worsened the scenario, the operators are deducting the balances by activating VAS without the consent of its customers.The only solution is to organise a committe for monitoring the telecom industry in India. The tariff should be reset to 50paise/min, which will help operators to increase ARPUs & it will facilitate customers also ..
pavan April 30, 2011 at 8:13 am
all private operators gives traiff plans for only one year. airtel is clearly mention
even bsnl also 49ps plans gives one year validity . the basic price will come soon to 1rs/min
Parminder Singh April 30, 2011 at 5:52 am
They should reduce the 3G tariff to about rs 100/GB
Shyam April 30, 2011 at 4:29 am
@amar
BPL MOBILE [Kerala], had introduced the first second billing plan in India…unfortunately the company is not operating now…first changed to hutch ,,nw itz vodafone kerala
rajiev April 30, 2011 at 2:23 am
no one are in loss!
rajiev April 30, 2011 at 2:15 am
agreed!@amar
s.santra April 30, 2011 at 12:16 am
I dont think biger player are in loss. Their arpu has come down a bit but their customer base increase rapidly. And call tariff is subject to competetion scenario. But now large operator reluctant to low call charges further ..
amar April 30, 2011 at 12:00 am
tata indicom first introduced per second billing in 5 or 6 year back
kochikkaran April 29, 2011 at 11:47 pm
All the major operators are mentioned in this article except the looter vodaf@#$ (East India Company 2.0) and idea for innovation in mobile field….
Raghu April 29, 2011 at 11:11 pm
@Amit.G
yes i have seen it now.Sorry didnt see it Earlier.
Raghu April 29, 2011 at 11:00 pm
@Manoj Abhigyan
yes this keeps happening. TRAI/DOT have to put a consultation paper on this to stop this looting by the operators. But after MNP, i think it has reduced considerably.
Amit.G April 29, 2011 at 10:59 pm
@Raghu
I have mentioned the link dude, u just click on it
Raghu April 29, 2011 at 10:58 pm
@tagore
Aircel has the worst network in Hyderabad and all Parts of AP. Uninor is much better operator compared to Airfcel
Raghu April 29, 2011 at 10:55 pm
@Amit.G
it will benefit new operators in that case, so new operators can definitely reduce the rates further,so old operators have to upto it, I think Now the increase in tariffs will not be there, becoz new operators will definitely reduce the ARPU of old operators, by just buying new sim and use the talk time and throw it and again buy another sim etc.and also the thing is adding of more subscribers every month and they have set targets and also MNP effects will keep operators on the toes.what do u say?
Raghu April 29, 2011 at 10:46 pm
@Amit.G
in which paper has it come?
Raghu April 29, 2011 at 10:44 pm
@Kaushik Roy
Better 4-5 GSM operators and three 3 CDMA Operators
Tremerin Dsouza April 29, 2011 at 10:43 pm
4g will introduce data tariff war among 3g & 4g operators.
Jaibeer April 29, 2011 at 10:42 pm
How to activate rim 3g via sms plz
Anwar Kacchi April 29, 2011 at 10:40 pm
SAD……there is no Any LIKE button
Amit.G April 29, 2011 at 10:26 pm
LATEST NEWS: “Uninor accuses bigger operators of overcharging and restrictive trade practice”
kirankumar April 29, 2011 at 10:15 pm
LTE(4G) will be the answer for tariff war.
Kaushik Roy April 29, 2011 at 10:14 pm
this is the present condition of almost all circles (10-11 operators per circle)
best is 4 GSM and 2 CDMA operators
by the way except MTS all other CDMA operators neglected their CDMA business
vivek April 29, 2011 at 10:08 pm
one thing we are forgetting is that, these operators charges too much for calling on same network,so calling on same ntwrk make revenue option to them, and those unlimited calling packs are too much,secondly the sms packs, they are too much cheaper,like to send widin d ntwrk and other one also, but operator earn from this also..
Keshav Jha April 29, 2011 at 9:38 pm
I think there should not be more than 6-7 GSM & 3-4 CDMA operators in a circle. Companies are not in loss. They are making profit by there increased customer data base.
Pankaj April 29, 2011 at 9:38 pm
well as far as tariff plans war is concerened.,I will proounce the word endless for it. Everytime each and every player will think of new idea and race will continue. Some will follo and some will lead. Per second plan of docomo was folloed by everyone. Now in 3G world, vodafone is leading. Recently t24 is growing up with 6GB data plan only at Rs 99 including ohter challending plans and offers.
abhay April 29, 2011 at 9:31 pm
I dont think TATA introduced the per second…it was launched by BPL mobile..
raju April 29, 2011 at 8:35 pm
1. A small correction: Docomo did not introduce per-sec.Rather it was its ‘parent’ Indicom introduced it years ago (of course, reflecting that era’s situation, as local 3p & STD 5p). I was its long-time beneficiary. Now we learn that, it was a ‘pilot-run’ !
2.One thing I fail to understand. Why cry about ARPU? If charges come down why jump heaven & earth? After all customers stand to reap the benefit ie it applies to both you and me. Its that simple.
RAJ April 29, 2011 at 8:32 pm
@DEEPAK
Can you tell us what is the increase. I suppose the roaming on Reliance was also 1p/sec.
RAJ April 29, 2011 at 8:30 pm
:: I suppose now the New improvement to Telecom plans is Circles Barriers should be removed. For example a SIM Number of MP and CG should be able to opt for Maharastra and Goa or wherever he travels more as Additional circle to his area for Roaming purpose for a nominal one time fee.
:: The Monthly Special tariffs like GPRS/ Call dropping or Low SMS Rates should be available in multiple months recharge options. Like call dropping tariff we can opt for 3 months period so no need to go to the shop to recharge every month.
:: Also, if you study every household requirement you will find that we need to call only few particular Numbers local or STD for longer durations? Like our family or children or parents etc. So even if you charge 1p/sec and if we make very long duration calls to particular numbers we spend a lot more money. The offers Like RIM to RIM free are very expensive as one would use that to call only particular numbers more often. Now I think New Options should come up like for Rs.100/- per month we are allowed to call a particular number of the same service provider unlimited STD. The other numbers may be charged as per base plans.
alamgir April 29, 2011 at 8:26 pm
Good survey, apparently AIRTEL and some others in a small way have found a way to gain the revenues that is “ROB THE CUSTOMERS”, which is working fine atleast for AIRTEL i think.
tagore April 29, 2011 at 8:05 pm
I wonder what prompted the writer to write this piece, as there has been no dramatic decrease in tariffs by any GSM operator worth its salt. Its true, Union, Aircel offer cheapest rates but they have virtually no network in some places even in state capital city in Andhra Pradesh. In the last few years, I never heard of any tariff offer from Idea, Airtel or Vodafone that needs a second look in our state. Docomo is also part of the pack, collecting nothing less than 1/sec. Moreover, there is little need to show pity on our established operators like Airtel, Idea, Vodafone and Tata as they had earned huge profits and spending huge money on worthless adverts. One should not forget India is volume based economy where the operators can earn huge revenue even at cheap tariffs given the millions of users compared to small countries. The only development that might have prompted the writer to ponder the issue is the greed of the government to earn more money from telcos in the wake of large sums it got through 3G spectrum auctions.
rajiev April 29, 2011 at 7:44 pm
chota recharge is by vodafone
tejas April 29, 2011 at 7:08 pm
well india is a way too big market and i dont think even at the current levels the companies will be in trouble. ya they definately cant make super profits like they did during the 2000-2007 periods. i guess this is whats troubling the operators. infact as i read today, if the dot eliminates the termination charges, call rates will go down further.
Arjun Chandrashekar April 29, 2011 at 6:52 pm
The Tata Docomo has To Be Punished. Because From This Operator, Lots Of Them Are Lost Their Money for Investing on Towers Installation. Especially TATA Teleservices are Not Having Right to Get License On A GSM Sector.
Abhijit April 29, 2011 at 6:50 pm
nice article.. Reliance few years back was cheapest like Rs.1/3min plans with lifetime plan benefits valid and also same in roaming and sms pack of 1ps/sms was just at Rs.11/month but now reliance is costlier now.. and many are increasing their rates or plan recharge price..
Now a days BSNL is only cheapest with low calling & roaming rates and 1ps sms pack also at rs.13/month only. and BSNL 3G is also cheaper compare to others..
PD April 29, 2011 at 6:47 pm
The telecom operators, the oldest,old and even the new comers resorted UNFAIR means to stay afloat and to make profit. And they are now paying thru their noses for it. Just see… what is happening in the TELECOM field.
rajiev April 29, 2011 at 6:38 pm
i don’t want end or this war, it’s healthy competition
Amit.G April 29, 2011 at 6:37 pm
Nice article, Well one should be aware that this lowest tariff thamasha will soon see an end. Now all operators including the new one realized that offering free sims/minutes will not work, Indians are clever in taking maximum benefit with minimum cost. DOT is already on its way to come out with new M&A policy which will squeeze out around 4 players/circle. at the max 6 operators will offer services per circle. Since now TRAI has proposed delinking spectrum with licence & hiking fee for almost 6 times (10800crores) & bringing down the licence period from 20years to 10years its for sure that All telecom operators will increase the tariff within 1 year. These policies are going to affect Old operaters vary badly & yesterday to pour more salt on the wound of old operators TRAI has propesed a policy where the interconnect charges will be removed. (interconnect charge is the money paid by operators to each others for using network, originating, carrying &terminating calls ie 75% of the total cost a call) since old incumbents get maximum money from interconnect charges paid by new oprtators having less customer base. This will again benefit new operators & hit old operators very badly. This will make old operators to find new source of income. ( note: the licence renewal policy will not affect new operators as their renewal comes in between 2025-2030)
Kgaurav April 29, 2011 at 6:34 pm
Not only reliance airtel and some other operator also increase romaing rates.
Manoj Abhigyan April 29, 2011 at 6:30 pm
Remember that about 8 years ago BSNL was charging Rs.1.20/min while other private operators were charging Rs.3/min and still BSNL was in profit. Do you remember that at that time it was hardly to see any advertisement by BSNL and still BSNL’s SIM were being sold in black and you had to wait for 6 to 12 months to get BSNL SIM? Do you have any data how much money is being paid by these private operators to the stars for advertising?
Manoj Abhigyan April 29, 2011 at 6:18 pm
Agree that call rates are low but what about cheating by operators? Are they not covering up their losses in this way? Simply calculate:
An operator with subscriber base of 100 million customers deducts Rs.30 once in 6 months then the amount will be Rs. 3000 million in just 6 months and Rs. 6000 million/annum.
Sougata Das April 29, 2011 at 6:01 pm
Reduction of the tariff is not fixed, it will always change with time…
Sandeep April 29, 2011 at 5:31 pm
New born baby will not servive with lesser ARPU they will increase rate’s on VAS and then TElecom industry will be settled
Tharun April 29, 2011 at 5:29 pm
It was supposed that 3g will put an end to 2g. But now 3g is a far goal with its high price.
If 4g can be introduced cheaper we may can replace 2g with 4g.
DEEPAK April 29, 2011 at 5:23 pm
Reliance has increased roaming charges