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'Airtel may raise mobile call rates up to 20 percent'

'Airtel may raise mobile call rates up to 20 percent'

By Press Trust of India | Updated: 20 December 2013 10:47 IST

Telecom major Bharti Airtel may increase mobile call rates by 10 to 20 percent, equity research firm Nomura said in a report.

"On our call with Bharti management today, it stated voice prices are still trending up and there is potential for a 10-20 percent increase from current levels," it said.

When contacted, an Airtel spokesperson said: "At the moment, we have no plans to raise headline tariffs anywhere in India. The current focus of the company is on reduction of discount schemes and promotional offers to improve realisations."

In September, the company increased tariff rate for postpaid customers, raising call rates by up to 50 percent.

Local and STD rates of 50 paise per minute to Airtel mobiles were increased to 60 paise, while calls to landlines went up to 90 paise per minute from 60 paise.

Nomura said that Bharti's management sees its recent agreement with Mukesh Ambani led Reliance Jio Infocomm reduces the risk of any "gorilla attack" fears and there is room for "peaceful co-existence" for all.

"It (Bharti) again stated that creating a "collaborate supply chain" will see genuine cost savings," the report said.

The research firm said that Bharti may consider exit from Africa it it fails to succeed in its strategy reach one of the top positions in each of the markets by either organic or inorganic growth measure as it could prove to be a suboptimal operation.

Nomura said that it expects Bharti Airtel to exit from Sri Lanka if its current position of number 5th in terms of market share doesn't improve.

The research firm said that Bharti sees era of SMS to fade away as the revenue its generates from mobile internet service over 6 times more than SMS.

Airtel saw increase revenue from mobile Internet services which now accounts for 10 percent of its total business, Nomura said.

"Currently, sale of data packs brings in Rs. 100 per user, versus SMS ARPUs of about Rs. 15 which is at risk from cannibalisation," the Nomura report said.

Airtel did not comment on upcoming spectrum auction but the research firm expects company to bid for airwaves in process which starts from January 23 next year.

"It is likely that Bharti could participate in the upcoming auctions in January 2014, we think," Nomura said.

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