Indian mobile operators Bharti Airtel and Idea Cellular have doubled or nearly doubled their voice call rates, suggesting that the long era of cut-throat price competition is coming to an end.
Bharti Airtel has effectively increased its standard voice call rates to 2 rupees per minute ($0.04), from 1 rupee previously, according to the Economic Times. Idea has also hiked its average rates to 0.02 rupees per second, from 0.012 previously.
Airtel is India's largest GSM mobile operator, and Idea Cellular is its third largest.
Airtel has defended the tariff hike as inevitable given the fact that tariffs have been falling for 12 straight quarters, even as network operators' costs have surged amid 3G rollouts and spectrum auctions.
A spokesperson for Vodafone India meanwhile toldTimes of India that the company welcomes its competitors' “price rationalization,” and suggested it is likely to raise its own rates in response.
Airtel and Vodafone this month also both increased their rates for 2G data services.
Credit ratings agency India Ratings last week predicted that operators will continue to increase tariffs in 2013, to make up for the dwindling room for growth afforded by adding new mobile subscribers in an increasingly penetrated market.
But the agency still assigns a negative outlook to the Indian telecom sector. Ongoing regulatory uncertainty on matters such as spectrum allocations – which is giving way to rising cost burdens on operators – and limited room for further consolidation is expected to continue to impact the industry in 2013.
Bold enough tariff hikes to offset these rising costs could help bring stability to the sector, but may also reduce minutes of use, India Ratings said.