Why Indian Mobile operators are reducing freebies, talktime?
Added On:11/23/2012 9:36:00 AM

Seems, leading mobile phone companies including Vodafone, Aircel, Bharti Airtel, Idea Cellular, and Tata Teleservices have begun a new trend of slashing talktime as well as reducing freebies on prepaid discount vouchers. 

According to a latest update, within last 2 weeks, mobile phone companies including Bharti Airtel, Idea Cellular, Vodafone, Tata Teleservices and Aircel have subtly tweaked their plans offered by various categories of discount vouchers. Where Bharti Airtel has reduced the validity of its discount vouchers from 90 days to 60 days, Idea Cellular has increased the price of a discount voucher to Rs 97 from Rs 72. As far as Vodafone is concerned, it has also trimmed the number of free minutes to 55 from 65 on a 'minutes pack' valid for five days costing Rs 22.

Presently, there are over 906 million plus cellphone connections, constituting nearly 96 percent of total connections.

According to Sanjay Kapoor, CEO for Bharti Airtel for India, “Falling margins due to intense competition had impacted its profits, and the company would have to increase tariffs to sustain operations". 

Intending to gain more margins and increase in sales, tele companies have taken this step in the fiercely competitive sector, industry experts believe.  

Although, the reduction in freebies and talktine are likely to have a 'meaningful impact' on telecompanies’ revenues per minute, but at the same time, increasing prices & slashing talktime would be ‘additional burden on consumer’s  pockets as they have to pay more for the same service.  

 

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