Indian mobile tariffs went up in December quarter: TRAI numbers

It was the result of much effort and pain by the mobile operators in India, but going by the latest signs, the uptick in average call rates in the industry may not have lasted more than a quarter.

According to the latest industry numbers, everything went up in the December quarter of 2011- right from average billing rates to average number of calls made per subscriber and average revenue per user.

What must be noticed that all of these things have been declining for all the quarters at least from the year 200-09, when new operators hit the scene. As such, even a slowing down of the decline in numbers such as the ARPU would have been good news.

However, in December quarter, they all went up.

For example, the most important figure — the average charge paid by a prepaid subscriber to make a call increased in both GSM and CDMA categories — the first time in many years.

In GSM, it went from 48 paise per minute to 49, while in CDMA average call tariff went from 40 paise to 41.

As a result, average billing rate (including post-paid customers) went up from 50 paise to 51 paise per minute for GSM and 47 to 49 paise for CDMA subscribers.

The reason is not far to seek. In the July-August period, all major operators including Bharti Airtel, Idea Cellular, Vodafone India and Reliance Communications raised their base call tariffs by about 20%.

It may be a different matter that the change seemed to short-lived, with new operators such as Tata DoCoMo continuing to chip away at the call rates.

However, for what it is worth, the operators can truly celebrate that at least for once in several years, they were able to increase tariffs and per-user revenues (ARPU) instead of relentlessly reporting declines (see charts below.)

As a result of the increased billing rates, average revenue per user (ARPU) went up from Rs 93 in the September quarter to Rs 96 for GSM and from Rs 71 to Rs 73 for CDMA.

It must, however, be said that for the CDMA operators like Reliance Communications and Tata Teleservices, the shift had started slightly early as they had ‘bottomed out’ earlier.

Tariff rates in CDMA is about 20% cheaper than in GSM services in India.

The good news, however, was not just on the average call rate front — it was also on the number of calls made by each subscriber. After relentlessly bleeding for several years, the number of calls made by an average subscriber rose for the GSM category in the December quarter, moving from 159 minutes to 161.

That said, per minute call rates have again been hit in the latest — March quarter — going by early evidence. Though industry-wide numbers are yet to be available, Idea Cellular noted in its quarterly performance review:

“The uptrend of Average Realisation Per Minute (ARPM) was halted with decline in ARPM to 42.2p from 43.3p, a harsh reminder of the market place battle and overcapacity.”