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Bharti Airtel, Idea reduce free minutes; Vodafone may follow suit

Bharti Airtel, Idea reduce free minutes; Vodafone may follow suit

Bharti Airtel, India's top mobile phone carrier has clarified that there will be no change in the headline tariff across India's 22 telephone circles, but the company will cut back on various promotional offers.

Idea Cellular, India's No. 3 mobile phone carrier by revenue and fourth-biggest by customers, has increased voice call prices in some telecommunications zones by withdrawing promotional offers, a company spokesperson said. She gave no further detail but said there was "no across the board" increase in call tariffs.

"In most circles, we have reduced promotional benefits and free minutes on both acquisition and existing usage," an Airtel spokesperson said.

Earlier, sources in the company had hinted about a hike in voice call tariffs in a phased manner though not across all circles simultaneously. (Read: Bharti Airtel raises voice call prices)

"We have been reiterating that increase in prices is inevitable, which is reflected from the fact that despite rising costs, tariffs have been falling over the past 12 quarters," Bharti Airtel said in a statement on Wednesday.

Bharti and Idea peer Vodafone said it was inclined to follow price moves by competitors but has not decided on precise steps.  The country's No. 2 mobile phone operator welcomed "the price rationalization for bonus cards, special tariff vouchers and free minutes from our competitors", saying they were "inevitable given the sharp input and energy price increases in the country".

"We are studying these moves individually across all our circles. We are inclined to follow to maintain consistency and competitive position though we haven't decided on our precise circle-wise moves," it added.

Sources said that Bharti Airtel, and most other telecom firms, will hike prices over the next few weeks. Bharti Airtel's net profits have been falling for the last 11 quarters as costs increased and a slowdown in customer additions limited revenue growth.

Voice calls account for about 85 per cent of the sector's revenues, with mobile data still at a nascent stage. But call rates in India are some of the lowest in the world, squeezing profits at operators.

India's mobile phone market, the world's biggest by customers after China, has not seen a sustained increase in call prices in the last three years after a vicious price war sent call rates tumbling in late 2009.

With inputs from Reuters

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