The stage is set for a second tariff war in telecom, with 3G spectrum winners beginning to roll out services. Newly announced 3G tariffs revive memories of last year?s 2G price war which cheered telecom users, but bruised operators across the board. Attractive tariffs, which could make 3G popular even among the mass market, are likely to disappoint operators aiming to improve average revenue per user with high-end data users.
Tata Teleservices (TTSL), the first private company to launch 3G, has priced voice calls as low as 0.66 paise per second and data similar to that of most broadband plans. A per-minute call would cost 40 paise compared to 60 paise on 2G.
The TTSL scheme leaves little space for Bharti Airtel and Vodafone-Essar to price the services much higher. Rivals too would have to offer per-second billing. In fact, operators unleashed the fiercest 2G tariff war last year with the launch of per-second billing ? a move which continues to bleed operators to this day.
After 3G auctions, Bharti chairman and managing director Sunil Mittal had told FE that he expected 3G services to be priced higher because of the expensive bids.
?The tariff packages announced by TTSL are affordable. The minimum commitment for a subscriber is Rs 500. Over the next few months, as other operators launch their services, this is likely to fall further? making 3G services popular even in the mass market,? Prashant Singhal, telecom analyst with E&Y said.
?Though 3G tariffs would fall over time, I don?t expect the kind of bloodbath we see in 2G to happen here. First, the number of operators providing 3G would be less. Second, rather than simply cut call rates, under 3G tariffs, operators would offer bundled data services with voice at lower-than-otherwise rates. This way, the total price of both data and call services to the user would come down tremendously, without hurting operators? margins the way it has done in 2G,? Romal Shetty of KPMG said.