Airtel announced increase in pre-paid tariff rates of its 'Advantage' and 'Freedom' packs - the two most popular packs that offered large discounts for calls and SMSes.
Users of Advantage pack, based on per minute billing, will now have to pay 60 paise instead of 50 paisa per minute for local and STD calls and 90 paise for calls to landlines.
Moreover, the company will charge Re 1 and Rs 1.5 for local and national SMSes respectively under the plan. The company announced that existing users will have to pay new rates after the validity of their existing packs end.
Similarly, the users of per second billing-based Freedom pack will be charged 1.2 paise for local and STD calls on mobile. The new tariff structure has been announced for Delhi, Rajasthan, Gujarat, Andhra Pradesh, Kerala and Madhya Pradesh telecom circles. There is no change for subscribers of other circles right now.
Announcing the rate hike, an Airtel spokesperson said, "Telecom is probably the only industry where despite increasing inflation, tariffs have been falling unabatedly. Continuously declining margins, high 3G and BWA auction prices, constrained spectrum and rural roll out aspirations leave us with little choice but to make some price corrections."
Another large player, Tata Docomo recently stopped all free SMS packs and raised its rate per SMS sharply to Re 1.
Though the number of mobile subscribers is still rising by around 12 million a month, the average revenue per user, an important indicator of the financial health, for the Indian players varies between Rs 105 per month to Rs 180 per month.
While the incumbent operators have been gradually phasing out some of the packs for reduced tariff, the newer operators are likely to use this as an opportunity to attract more subscribers and will not change rates.