Tariffs Set to Rise + Retailer Commission Falls

In a meeting with major Telecom companies and Retailers, managements’ intention was clear – raise tariffs in the sector, which hinted at abating competition. The changes are centred on special tariff vouchers, which are promotional in nature and not regulated. In addition, dealer commissions have come down across operators over the last few weeks – this would not affect RPMs but have a direct impact on margins.

Almost all operators have started making minor changes to their tariff plans. We profile some of them below.

Vodafone & Airtel: Special tariff voucher (STV) of Rs37 to reduce long distance call rate to the states of UP and Bihar to 25p/min. Call rates increased to 30p/min.

Idea: Earlier: STV of Rs22 to reduce long distance call rate to Rs1 per 3 min. Now: Same 22 STV now changed to 35p/min.

Videocon: Earlier: STV of Rs17 reduced long distance call rate to 25p/min for an entire month. Now: STV of Rs17 gives reduced calling rate of 25p/min only for the first 10 minutes of the month. After that the call rate rises to 50p/min.

Declining Retailer Commission:Over the last few weeks, almost all operators seem to have brought down the commissions on the first recharge (which goes along with the SIM card) – from Rs50 to Rs35 on a sale of Rs110.