India Mobile services private telecom player Bhartiairtel today hinted that mobile tariffs may increase further due to the rising operating costs. “The pressure on this industry will be acute since the operators have to serve the rural markets as well as low-end customers, who use only voice calls and text messages,” said Mr.SunilMr.Sunilmittal, chairman, Bhartiairtel at an industry event. He added the correction in tariffs was required to compensate for the rural operations and the cost of operations had gone up exponentially. Indian cellphone users have been enjoying the lowest tariffs plan in the world for the last two years. However, due to high competition and tariff war, which was unleashed by new Mobile services telecom players, the margins and the profits of the operators have taken a hit. The mobile service providers are also reeling under big pressure due to high debt taken for acquiring third generation (3G) and broadband wireless access spectrum in the auction last year.
Bhartiairtel, Vodafone Essar and Idea Cellular had recently increased their prepaid tariffs in almost all circles by 20 per cent. Bhartiairtel was the second private telecom operator to increase tariffs after Tata Docomo, which raised the prices in 1/2 circles two months back. Subsequently, Vodaphone Essar, Idea-Cellular and Reliance Communications service had also increased the prices in most of the circles. The Telecom Regulatory Authority of India had sought explanation from operators who had increased tariffs. Currently, operators have to notify Telecom Regulatory Authority of India of any change in the tariff plan, introduction of new plans as well the changes in the prices within 30 days. At the same event, minister for communications and information technology Mr.KapilSibal spoke for the need to consolidation in the telecom industry. The department of telecommunications (DoT) is working on a new telecom policy 2011, which will talk about mergers and acquisitions for the players apart from other things. "It's time for us to consolidate the industry. We can't afford 12 13 players in a circle. I think spectrum can be shared and I don't think there is a need for over-regulation for this," he added.