Rate Wars in Delhi (GSM providers match CDMA rates)
Cell-War -- Airtel drops rates too
ENS Economic Bureau
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New Delhi, Jan 19: The country's cellphone wars, which entered Round III with Airtel joining the fray in the capital today, are all set to get more bitter. Sources say MTNL is likely to announce a further cut in its rates once it begins its services at the end of the month -- with Essar's cuts of Thursday and Airtel's yesterday, MTNL's mobile services are no longer as competitive as they were when it first announced its rates a week ago.
And, if consumer body Telecom Watchdog has its way, another very sharp cut in rates may also be forced, this time through the courts who it plans to approach soon. According to Anil Kumar, Secretary, Telecom Watchdog, the government began charging cellphone firms in metros an annual license fee of Rs 6,053 per subscriber in 1999 -- this is when they first hiked their monthly rentals to Rs 600 to cover this. Now, under the revenue-share arrangement, the per subscriber license fee averages around Rs 1,200 -- so, logically, the monthly rentals should be down to around Rs 100 instead of the Rs 400 or so announced by both Airtel and Essar.
Round I of the fare war was set off a week ago when MTNL announced the tariffs of its long-awaited cellular services. As compared to Airtel and Essar's monthly rentals of Rs 475 then, MTNL announced a figure of Rs 400. And as against an average rate of Rs 4 per minute for incoming and outgoing calls for these two players, MTNL priced its outgoing calls at Rs 2.7 a minute and incoming calls at Rs 1.5.
On Thursday, Essar joined the battle, lowering its monthly rentals to Rs 395, and Rs 2.8 for outgoing calls and Rs 1.6 for incoming calls. Airtel joined the battle today -- its rentals are Rs 400, while outgoing calls are priced at Rs 2.85 and incoming at Rs 1.6.
Not surprisingly, top executives of both Essar and Airtel are denying that their price cuts have anything to do with MTNL's pricing. Says Sudershan Bannerjee, CEO of Hutchison Essar: ``It is not a price cut but a market research-driven positioning. Our price revision would have happened in January irrespective of the entry of other players in the market. Various reasons like the localisation in the manufacturing process and liberalisation of duty structures have led to the tarrif readjustment.''
Adds Airtel's CEO Sanjay Kapoor: ``It is not true that the users in Delhi have been paying higher prices. The time when we started the services in Delhi we were charging rupee 16 per minute and the fact that we have come down to our present rates shows that we have been committed to lowering prices whenever possible.''
Though that does sound a bit incredulous, customers aren't complaining as they're still savouring the lower rates. And hoping that Telecom Watchdog, and/or the competition, lowers them even further. |
