Reliance Ponders to join Its Rivals Per Second Crew
Reliance (RCOM), the esteemed industry contemplates whether to ink with its contenders Bharti Airtel and Vodafone Essar in offering “per second billing” tariff option to its customers. RCOM has recently joined the ongoing mobile tariff war by announcing its 50 paise a minute plan, “Simply Reliance”.
But in vain, the experts tracking the telecom sector threatens that the market where the average revenue per user is already among the lowest, such tariff pressures will bang profitability. “Per second billing” plan can just break down the call rates and nothing can be done beyond that.
Reliance Communications (RCom) saw its consolidated net profit for the September quarter more than halve (down 54.8%) to Rs740.3 crore compared with the June quarter. The company priced worse than Bharti Airtel, because the September quarter saw RCom announce the tariff plan of 50 paise per minute for local and national long distance calls. Bharti also made similar offers, while Tata Docomo introduced per-second billing. RCom’s total revenues declined 7.2% to Rs 5,702.6 crore compared with a 1% fall for Bharti.
It is stated that the main decline is due to its total operating costs. RCOM also said its ‘Simply Reliance’ plan is the most excellent when compared to the per second tariff plans offered by opponents. Reliance urges that its “Simply Reliance” plan allows subscribers to make a call at 50 paise per minute from any Reliance phone to any phone in India —across fixed line, CDMA, GSM, Pre-paid and post-paid plans. The rate applies to all roaming calls, at any hour of the day.
New telecom contestants Etisalat, Swan, Aircel and Telenor-Unitech are under pressure to respond with more money-spinning tariff plans in order to compete better with serving phone firms such as Tata Teleservices, Bharti Airtel and others.
To retain or gain its market share and also to overhang its competitors RCOM believes there will be a consolidation within the next two years.