Business Daily from THE HINDU group of publications
Wednesday, Oct 07, 2009
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Business Daily from THE HINDU group of publications Wednesday, Oct 07, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Telecommunications Marketing - Trends Markets - Stocks
Thomas K. Thomas New Delhi, Oct. 6 The ongoing tariff war in the cellular segment could bring down the average revenue per minute for operators, but it would also lead to consolidation in the industry, according to analysts. The latest round of tariff war was triggered by Tata DoCoMo when it announced per second calling rates. On Monday, Reliance Communications raised the pitch by introducing a new plan whereby customers can make all calls at 50 paise a minute. To top it all, the telecom regulator announced at the sidelines of an industry event in Geneva that seconds-based tariff may be made mandatory for all operators. “We had assumed the industry average revenue per minute to fall to 50 paise in FY 2011, a CAGR decline of 7 per cent per annum from the current levels. We now believe that with this latest RCom tariff, the average revenue per minute (ARPMs) could decline by another 10 per cent. This short-term pain could lead to faster consolidation of the industry,” said a report from Morgan Stanley. Telecom stocks took a beating on the Bombay Stock Exchange as a result of these concerns. Reliance Communications lost 10.64 per cent to close at Rs 268.25. Bharti Airtel dipped 10.22 per cent and ended at Rs 359.40. Idea Cellular went down 8.29 per cent to close at Rs 64.75 and MTNL tanked 5 per cent at Rs 82.90. Analysts also said that while some of the new schemes announced may not be sustainable in the long run, consumers also stand to lose out partly. “Operators offer a lot of free talk time in the minute-based tariff, but I don’t think users will be given free usage in the per-second billing plan. This could in fact neutralise the impact of seconds-based calling on operators,” said Mr Prashant Singhal, Partner, Ernst & Young. RCom launches 50 paise tariff across-the-board Average revenue per user for GSM operators falls below Rs 200 Short txt ur messg and save on tariff Falling revenues despite rising base, a concern for telecom sector Telecom sector may be hit as recession bites DoCoMo’s entry to set off race for mobile applications More Stories on : Telecommunications | Trends | Stocks | Bharti Tele-Ventures Ltd
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