Idea Hikes Tariff For Postpaid Users

Idea Cellular Ltd., the country's third largest telecom operator by revenue, has increased its postpaid call tariffs by over 30 percent in several circles.

The company could not be reached immediately for comment but its subscribers have received text messages informing them about the increase in tariff, effective May 15, 2012.

Idea has also increased its SMS rates up to 100 percent in several post-paid plans.

The hike in tariffs is hardly surprising considering the operators have been warning of the tariff hike for quite sometime now. This was expected in the wake of the growing tax burden, unstable regulatory environment and falling margins.

Earlier this month, Vodafone India had also announced around 20 percent hike in its tariffs for a few circles. Bharat Sanchar Nigam Ltd. (BSNL) also indicated a price hike in its tariffs recently. (See BSNL May Go For A Tariff Hike.)

The theory doing rounds is that operators believe a hike in the 2G tariff is the only way to push 3G services in the country. "As long as 2G tariffs are rock bottom, there is little incentive for subscribers to go for 3G. The strategy is to increase 2G tariffs and bring them at par with 3G, which would increase the 3G uptake," says a prominent analyst on the condition of anonymity. (See Bharti 3G: Second to None?, Jonathan Bill: Head - Business Development & Innovation, Vodafone India and Poor Network Hampering 3G Growth: Study.)

Jatinder Singh, Principal Correspondent, Light Reading India