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Bharti Airtel reduces roaming charges to 50 paise/min

Published on Sat, Nov 21, 2009 at 11:26 | Source : CNBC-TV18

Updated at Sat, Nov 21, 2009 at 14:48

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In an interview with CNBC-TV18, Atul Bindal, President of Mobile Services at Bharti Airtel Ltd , spoke about the fairly large sized cut in its roaming charges.

Here is a verbatim transcript of an exclusive interview with Atul Bindal on CNBC-TV18. Also watch the accompanying video.

Q: Could you tell us about the quantum of the cut and why you have slashed charges so much?
A: This is really going back to the strategy of Airtel Advantage, which we unveiled a couple of months ago. We had a base of over 113 million customers backed by 100,000 towers. This gives a network advantage, superiority and customer service. The on-net strategy of providing Airtel advantage plan is quickly following up with per second option SAT. There are over 34-40% of our customers who reside in districts which are bordering a cross state boundaries.

In all those areas, it is only Airtel which has the competitive superiority of having a seamless coverage and provides complete contiguity. By providing these kinds of benefits, we would see significant elasticity of consumption kick in with the non users becoming users.

Also Read: Bharti Airtel cuts mobile roaming charges

Q; Roaming charges are now down to 50 paise per minute. Have you done any back of the envelop calculation on how this might impact revenues? What kind of volume increase you hope to see?

A: This would not have any kind of negative impact on our revenues unlike a broad based cut on tariffs where the industry revenue could see a little a bit of downward spiral. It is Bharti Airtel's network, which gives us the cost advantage of leverage and also offers this kind of service to our customers.

We are hoping our gains to come out of three specific buckets. We see roaming consumption to go up both on incoming and as well as outgoing.

A huge number of customers switch off their phones as soon as they cross state boundaries due to the of the fear of high roaming charges. This signals death of roaming. Therefore, a number of non-users should actually get converted to users. For the high-end customer, it is a very strong piece of mind benefit as he roams anywhere across the country.

Q: There are expectations that Bharti and other telecom makers will relook at the SMS charges. Is that on the agenda to relook at and bring down SMS charges as well?
A: We have never played on price or believed in being a price warrior. It has been as a strategic play to push the envelope of affordability across urban India. We have been doing this successfully. In the rural parts of the country, we continue to do this. Everything has to sit on the plank of on-net and off-net strategy and should be able to differentiate it in a compelling competitive way for our customers. If we believe that there are other opportunities, we would look at those from time to time.