New Delhi: Reliance Communications is likely to
join the per second tariff war engaged in by rival mobile
operators to grab more subscribers.
"Per second billing is another option that we have
evaluated internally. While ‘Simply Reliance’ is delivering
positive traction for us at present, we are keeping all our
options open," Satish Seth, group managing director at
Reliance Communications told analysts in a conference call
on Monday.
As an aggressive pricing strategy, Tata DoCoMo, a joint
venture of Tata Teleservices and Japan’s NTT DoCoMo, had first
launched the per second billing in June. Airtel, Vodafone,
Idea, Aircel and BSNL have since then followed suit.
Seth said the launch of services many operators over the
past few months across the country will lead to consolidation
in the next two years.
"This has led to heightened competitive activity and
build-up of over-supply in the industry leading to significant
tariff rationalization. We believe that in the near term such
competitive activity will only increase and the overhang of
these developments over the next few quarters will accelerate
the process of industry consolidation in the next 18-24
months", Seth added.
Call rates in India have dropped to less than 50 paise
per minute and more tariff plans for rural customers are being
planned which could squeeze profit margins of companies, feel
analysts.
India, which has 11 mobile operators, adds 10 million
users a month. And there is scope for grabbing more users as
the tele-density is still less, the analysts say.
RCom saw its net profit drop by 52 per cent to Rs 740.30
crore on a consolidated basis for the second quarter ended
September 30, 2009.
Seth said during the second quarter, margins have been
impacted primarily on account of increased network and
operational costs following our nationwide GSM roll-out,
intense competitive activity in the market place, build up of
excess capacity and aggressive nationwide tariff restructuring
in the industry.
Bureau Report
First Published: Monday, November 02, 2009, 22:39