Rivals may ape Bharti Airtel higher net call charges: KPMG

Shetty says the intent of the move seems to be to mitigate the risk of serious voice revenue cannibalisation.

Below is the transcript of Romal Shetty's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: What do you think the repercussions would be for Bharti’s moves and do you think other service providers like Idea, Vodafone etc could follow suit?A: Firstly, this concept today of Whats App or Viber can basically provide a service without any charges, it is not free because there is still a data charge but it is at a very low. So to give you an example, I might give a call to US for about maybe Rs 8-10 whereas in this probably it will be twenty five paisa or even less than that.So the telecom companies are losing money on every call made and there is a cannibalization of their international or their other services revenue and Whats App and Viber are not paying any money to Airtel or Idea or anybody. So the whole idea of this is to ensure that they are losing a lot of revenues to now have some kind of charges, which compensate for the loss of revenue. So that is the first thing. Telecom companies are going to lose money and they are going to lose more money as these services become more and more popular.So I think beyond a point of time, other carriers will follow suit because you suddenly cannot have international revenues coming down by 50-60 percent. It is just that the magnitude of the rise in prices would be different for each operator.Latha: What are the chances that one of the competitors doesn’t pull because you just want to conserve your customers, once you get angry with your service provider and walk out, winning back that customer maybe tough. So one of them could play a spoilsport?A: It is possible but over the last three years, at least the large operator have consciously said that we will not play too many price games and have decided to consciously improve prices. If you see the increase in prices, it has happened slowly over the last two-three years.

Latha: You think the mice can play till only the cat arrives? After all there is expected big competition from Rel Jio?A: Yes, when Reliance obviously comes into the market, I am sure that they would come up -- because they are going to come in to a market where there are already existing operators and subscribers. So they will have to do something disruptive in the market. So I am sure that they would bring out something new and obviously being 4G, they would use a lot of things from a data perspective. But I think most of these operators have now been there for sometime, they understand the margin game and beyond a point of time, going below the margins will hurt them.Sonia: Have you done any kind of number crunching on how much more expensive will this pay rates be compared to the earlier data packs and how much of a incremental operational benefit will some of these players get?A: We haven’t done any specific one because this was just done a few days back by one of the operators. But like I said if you look at it typically I give you very back of the hand calculation that I could be doing on an international call or whatever which is at about Rs 8 or Rs 5. Now I can probably do it at less than 0.25 paisa or Re 1. So I think there is a significant amount of money being lost on every call. So they are not going to increase it as to Rs 5 or Rs 8 but when it looks from a percentage perspective, it looks very high but from a paise, it maybe 10 paisa to 35 paisa. That is what will be the incremental difference.