Mobile firms slash long distance rates

Friday, 03 January 2003, 20:30 IST
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NEW DELHI: Indian mobile phone operators Thursday sharply slashed the charges for long distance calls in a bid to retain customers following the launch of cheaper limited radius cellular services. All the leading private sector mobile service providers cut mobile-to-mobile domestic long-distance charges beyond 50 kilometres to 2.99 a minute from a current peak of 9 a minute. The new rates will come into effect from midnight Thursday night, IT and Communications Minister Pramod Mahajan told a press conference here on behalf of the cellular services providers. "If you go any distance beyond 50 kilometres...whatever may be the distance and whatever may be the time, the cellular industry has decided to charge you 2.99 per minute as a flat rate," Mahajan said. The decision was taken in a meeting of the country's leading cellular operators that included representatives of Bharti Tele-Ventures, Hutchison, Escotel, BPL Mobile and Spicecorp. The charges for a distance up to 50 kilometres will remain unchanged at 1.20 per minute, he said, adding the three slabs currently in force for calls beyond 50 kilometres will be replaced by the new flat rate of 2.99. Earlier, mobile phone subscribers were being charged 2.40 for calls up to a distance of 200 kilometres, 4.80 for a distance up to 500 kilometres and 9 for a distance beyond 500 kilometres. "This is just the first instalment and I am told many more are likely to come on a weekly basis," Mahajan said, reacting to reports that mobile firms were planning many sops to prevent users from shifting to cheaper limited mobility services. The tariff reduction by mobile phone operators comes close on the heels of the launch of wireless telephone operations, or wireless in local loop (WiLL) services, by Reliance Infocomm Ltd. at huge discounts. Reliance Infocomm, 45 percent owned by India's Reliance Industries, has decided to offer a promotional three-year membership at 3,000, a free handset and a monthly payment of 600, which includes 400 minutes of talk time at 40 paise a minute. Incoming calls, voicemail, text messaging and Internet access would all be free on the Reliance network. Based on its pricing strategy Reliance hopes to grab a 15 to 20 percent share of India's mobile market by the end of 2004. Currently, Indian cellular companies charge a rupee a minute on an average for an outgoing call. The incoming calls are also charged. Reliance uses cheaper code division multiple access (CDMA) technology for offering mobile services within city limits. Other cellular operators offering unlimited mobility work on the rival global system for mobile communications (GSM) platform. Unlike cellular services on the GSM platform that can be used by customers when travelling, WiLL services on the CDMA platform are limited to a certain region, usually within the city area. India, one of the fastest growing telecom markets globally, has seen a sharp decline in cellular airtime tariffs and mobile handset prices in the last couple of years as competition soared with the entry of new players. The Indian cellular market has for the last few years been the most dynamic segment of the telecom industry and amongst the fastest growing. The country has about 10.5 million mobile phone users now and it is forecast to grow by a compounded 52.5 percent to 30.9 million subscribers through 2005. T.V. Ramachandran, director general of Cellular Operators Association of India (COAI), said that the mobile phone operators would take aggressive action to hold on to their market share in view of the launch of limited radius phone services. He said cellular operators decided to announce the new tariff package despite the industry suffering accumulated losses of 80 billion to benefit the subscribers.
Source: IANS