GSM operators hike local SMS tariffs by 20%

Private GSM operators have hiked local SMS tariffs by a flat 20%. Even local call rates in the capital have seen an increase. This comes on the back of a little over 10% hike in STD tariffs. Will the government view the move as a mere coincidence.

The Hutch came as a bit of a shock for most of its customers. It’s not so much the extent of the hike which is only 20%, but the fact that rates are being moved up in a marketplace that has gotten used to tariff cuts that customers are finding hard to digest.

Hutch was the first to hike SMS tariffs, but big boy Airtel followed suit just hours later. In fact, local call rates in the capital have also been hiked by 20%. This hike in tariffs cannot be viewed in isolation as it comes on the back of a quiet increase in STD tariffs over the last 15 days.

Almost all the private GSM players have hiked STD tariffs by a little over 10%. Airtel, Hutch and Idea hiked their STD tariffs for prepaid customer from Rs 2.40 per minute to Rs 2.65 per minute.

When contacted a top executive of a private GSM player said, "There has just been a re-alignment of tariffs and one shouldn't read too much into it."

But as in the case of cement, this could be seen as more than just a mere coincidence. A couple of months ago, all private GSM players decided not to cut roaming tariffs despite state owned BSNL and RelCom and Tata Tele doing so.

The regulator and the government are keeping a close watch. Telecom Minister Andimuthu Raja has gone on record to say there is room for tariffs to come down. But since it’s the domain of the regulator, Raja says he will meet TRAI chairman Nripendra Misra to see how much head room there is.

Telecom operators, meanwhile, say tariffs can come down only if the government brings down licence fees.