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Vodafone hikes call tariff for post-paid customers in Mumbai by 20%

MUMBAI: Leading telecom operator Vodafone India on Tuesday raised its call rates by a steep 20 per cent in Mumbai circle, a possible indication that cheap tariff would end sooner than later.

Vodafone has been offering a call rate of 1 paisa per second for both local as well as national calls.

In an SMS alert to its post-paid subscribers, Vodafone said local and STD rates will now be 1.2 paise per second. The new rates are effective from May bill cycle.

When contacted, Vodafone officially declined to comment on hike in call rates. “We do not comment on tariff structures,” a Vodafone India spokesperson told PTI.

Telecom operators have been offering cheap call rates, considered one of the lowest in the world, to garner more and more subscribers in an competitive environment.

The booming telecom industry ran into controversy after 2G spectrum scandal came to light. The Supreme Court had cancelled many lincences and had ordered auction of the radio-waves.

Industry players have warned of an increase in call rates after sector regulator Trai recommended a steep rise in spectrum price. A couple of large foreign companies have already declared their intension to quit India, and have taken massive write-downs in their books.

The tariff hike comes immediately after Vodafone’s recent letter to Telecom Minister Kapil Sibal in which it has said Trai’s recommendation on 2G auction, under which it had proposed a 13-time increase in base price, and re-farming of spectrum, as “legally flawed.”

Vodafone criticised Trai’s re-farming recommendations, claiming the company will have to invest around Rs 10,000 crore in case it is allocated spectrum in the 1800 Mhz band, instead of 900 Mhz band.

However, there was some glimmer of hope for the mobile players after the Telecom Commission, the highest decision making body for the industry, yesterday asked Trai to relook at its entire proposal.

Five other mobile operators, including the market leader Bharti Airtel, have also flayed the telecom regulator for issuing a “highly retrograde set of recommendations on spectrum auctions” and demanded that Sibal reject all key proposals suggested by Trai.

They have been claiming that high minimum bid prices proposed by the regulator for the Supreme Court-ordered auction of second-generation radio waves will lead to 30 per cent hike in call rates.

On April 24, Trai Chairman JS Sarma had said high bid prices proposed “shouldn’t be a cause for revising tariffs”.

He had mentioned that call rates had fallen in the past three years due to competition, and not because of spectrum prices.

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Posted by on May 1 2012. Filed under Business India News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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