The Telegraph
Since 1st March, 1999
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Slash beep for cellular tariffs

Calcutta, April 1: Cellular operators are likely to bring down tariffs further in a bid to position the mobile as a cheaper proposition vis-à-vis a landline connection.

“We expect a surge in cellular connections from mid-2003. The main target is the 35-million landline user base, who will now have to shell out more on account of increased rentals and reduced pulse rates,” industry sources said.

The new tariff rates will make it more feasible to use a mobile phone along with the entire gamut of services offered, instead of a mere communication tool like the landline.

“New subscriber connections dropped by almost 20 per cent from January to February as consumers were waiting for the launch of Reliance,” he said. “However, things have started picking up and we expect a 20 per cent growth in new additions in March.”

Though apprehensive about the below-cost tariff structure, cellular operators say that the only way to survive the competition is to match the rates of basic and limited mobility service providers.

“Mobile tariffs in the country are already the lowest in the world. The below-cost tariffs reflect the intensity of market competition. However, it is the only way to expand the market,” said an executive of a national service provider. “A substantial user base will compensate for the low rates.”

The cellular industry has already suffered accumulated losses of Rs 7,700 crore, of which Rs 800 was in the last financial year. This is against a cumulative investment of around Rs 25,000 crore till March 2003.

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