Financial Daily from THE HINDU group of publications
Saturday, Aug 28, 2004
Info-Tech - Telecommunications
Marketing - Strategy
BSNL cuts STD rates 33 pc 60% reduction in mobile tariff
New Delhi , Aug. 27
ADDING fuel to the ongoing tariff war, Bharat Sanchar Nigam Ltd (BSNL) on Friday announced major tariff cuts for its 40 million subscribers, which include a 33 per cent reduction in STD charges. The company has also reduced local call tariffs for its mobile users by almost 60 per cent, making it the cheapest cellular service in the country.
While private cellular companies recently announced a tariff reduction for pre-paid consumers only, the state-owned company has taken a step ahead and reduced tariff even for its post-paid users by nearly 40 per cent.
With this, BSNL's charges for domestic long distance calls above 200 kilometres will be uniform at Rs 2.40 per minute for both mobile and fixed line subscribers. The move is aimed to stem the outflow of STD traffic from fixed line to cellular.
Announcing the tariff, the BSNL Chairman and Managing Director, Mr V.P. Sinha, said, "There is scope for reducing the tariffs further and, at the same time, make profits. Indian operators are getting higher income compared to operators around the world. We expect BSNL's volumes to grow by 40 per cent because of this tariff cut and a 7 per cent growth in our revenues this year."
The new tariff will be effective from September 10 and will be applicable to calls made to any network from a BSNL phone.
Post reduction, a Chennai to Delhi call, which cost Rs 3.60 per minute earlier, will now cost Rs 2.40 a minute. STD charges for short distances have also been cut. A fixed line subscriber in Meerut who used to pay Rs 1.80 per minute to call another fixed line user in Delhi will now pay Rs 1.20 a minute.
For BSNL's pre-paid cellular subscriber, the same call to another cellular user will cost Rs 2 per minute instead of Rs 2.40 paid currently. Local call tariffs for pre-paid mobile users have been dropped to as low as 90 paise a minute compared to 99 paise announced by competitors.
For post-paid mobile subscribers, BSNL has reduced local calls rates from Rs 1.40 a minute to 80 paise a minute. Other cellular operators are expected to follow suit and slash prices for their post-paid users. Mahanagar Telephone Nigam Ltd, the state-owned operator in Delhi and Mumbai, is also likely to revise its tariffs.
BSNL has also introduced a 15-second pulse rate for the post-paid subscriber. This means that if a subscriber makes a 10-second call, he will pay only 20 paise and not for the entire minute.
To meet the surge in demand, the company is rolling out 12 million cellular lines across the country.
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