24 Aug 11: The government has increased mobile tariff rates to the pricing levels of 2008. The mobile tariffs are expected to increase by 17 percent. Bharti Airtel has already increased its tariffs by 20 percent and all the other telecom operators will also follow the same suit. The tariffs were reduced in 2008, due to increase in telecom operators from 7 to 14 which led to huge competition.
The Cellular Operators Association in India (COAI), has said that the ‘no cap’ policy introduced by government has led to the decrease in tariff rates tremendously for both voice and data. But this decrease in call charges was not matched by the increase in minute of usage per connection per month. In 2007 the usage of minutes was 465 minutes/month and in the year 2010 it was reduced by 20 percent to 369 minutes/month. This is threatening the sustainability of the industry. Even the National Telecom Policy, 2011 and the 12th Five year plan too presents no opportunities for the growth of the industry.
The telecom industry has seen many of the major reductions in the period 1998 to 2008. The tariffs have dropped from a peak of Rs.15.50 per minute in 1998 to an average of 50 paise per minute in 2010.
Source: Times of India