Bharti joins 1-paisa-per-sec tariff war

Bharti Airtel has announced a new scheme of per second billing. Interestingly, the announcement has come just a few hours after the company reported its quarterly numbers. CNBC-TV18’s Siddharth Zarabi reports.
Here is a verbatim transcript of Siddharth Zarabi’s comments on CNBC-TV18. Also watch the accompanying video.
Mr. Akhil Gupta, Deputy Group CEO and MD of Bharti Enterprises made a reference to irrational pricing. This is irrational pricing according to Bharti, which really Tata DoCoMo started off with a new aggressive campaign when it launched its GSM services plans across other platforms within its network. Then newer operators like MTS for instance came up with its per second billing plan, and some other people have also adopted it.
But really the big boy adopting this per second billing plan, one second for a local as well as STD call for customers within the Airtel networks to around 115-116 million and off net essentially another two paisa more. So if you look at what Bharti is really doing is it is responding to market expectations. In fact during Bharti’s conference call today, there were consistent questions and also during the media interaction in the morning about why is Bharti as the dominant market leader not responding to these tariff challenges.
The first real hint of the company’s plans came during this conference call where the management said that we will not allow new operators price advantage for a long period. Within a couple of hours of that the company responded. This will definitely have an impact going forward.
It cannot be quantified per se. But at this point in time there is no data available as to how many subscribers hold calls below a minute. But the Bharti management has consistently been in sort of some ways saying that they would not respond to it, they have responded. Perhaps at the back of their mind is the fact that between 25% and 30% of all subscribers in India are viewed to be those who have dual-triple SIMs and especially those who take these competitive offers from newer operators, use them, and throw them.
I spoke to Bharti’s management immediately after this plan was announced and they said that they were in this plan for good. They have responded to market expectations, given their size and scale and the fact that this brand will therefore be able to retain customers for a longer period.