Vodafone, Idea increase pre-paid tariff by 20%

Two leading mobile operators, Vodafone Essar and Idea Cellular, are understood to have increased pre-paid tariffs by up to 20%, in line with the recent Bharti Airtel move.

According to industry sources, the tariffs were increased few days ago. When contacted Vodafone spokesperson declined to comment saying, "We do not comment on tariff issues."

Idea officials said the company is in the silent period due to pending quarterly financial results and did not offer any comment. Vodafone and Idea are pan India operators and have hike pre-paid tariffs in certain circles. The details of new tariff could not be obtained.

Last week, Bharti Airtel, the largest telecom operator by subscriber base, had raised rates for pre-paid users by 20% for certain packages across several circles.

It had cited declining margins and high 3G and BWA auction prices as reasons for the hike.

"Telecom is probably the only industry where, despite increasing inflation, tariffs have been falling unabated. Continuously declining margins, high 3G and BWA auction prices, constrained spectrum and rural roll-out aspirations
leave us with little choice but to make some price corrections," it had said

While Bharti had over 167 million subscribers in May, Vodafone and Idea had 139 million and 93 million users respectively, according to the data from Telecom Regulatory Authority of India.

New operator Uninor had indicated that it will wait and watch the situation.

Industry officials said that smaller players, competing against established brands, will have to remain very attractive to customer. India is the world's second-largest mobile market after China. In the past few years, it witnessed a cut-throat tariff war which led to the boom in the sector -- and one of the lowest call rates in the world.

The tariff cuts dented the profitability of most mobile phone companies in the 14-player market, but also saw the sector add over 400 million new customers in the past two to three years