After being steady at 48 paise/min for 5 years, call rate down to 16 paisehttps://indianexpress.com/article/technology/tech-news-technology/after-being-steady-at-48-paise-min-for-5-years-call-rate-down-to-16-paise-5272309/

After being steady at 48 paise/min for 5 years, call rate down to 16 paise

Since many users are still using feature phones, they are paying for voice services as a separate item. Once the migration to smartphones picks up, they would, too, begin using bundled packs causing the average outgo to fall further.

TRAI, telecom sector, call rates, voice tariff in India, Telecom Regulatory Authority of India, Reliance Jio, business news, indian express
Fall triggered in Sept 2016 by RJio’s entry; tariffs may decline further.

After remaining in the range of 48 paise per minute to 51 paise per minute for over five years between March 2011 and September 2016, average voice tariff in India have fallen to a third at 16 paise per minute as of March 2018, data released by the Telecom Regulatory Authority of India (TRAI) shows. Sectoral experts and analysts suggest that the sudden fall in tariffs was primarily due to the rise in competition caused by the entry of Reliance Jio in September 2016, which began offering services for free at the time of its launch.

Data sourced from the regulator’s quarterly filings on telecom sector’s performance indicators shows that while the per minute voice tariffs were range-bound between 48 paise and 51 paise till September 2016, it fell to 44 paise per minute in December 2016, 31 paise in March 2017, 27 paise in June 2017, 23 paise in September 2017, 19 paise in December 2017 and to 16 paise per minute in March 2018. However, the minutes of usage on the networks of telecom operators followed a similar trend seeing slow growth between March 2011 and September 2016, and then suddenly increasing. As of March 2011, the average voice consumption was 349 minutes per subscriber per month, and it increased to 366 minutes per user per month as of September 2016. As of March 2018, it had increased to 584 minutes per user per month.

“Once voice was started being given for free (by Reliance Jio), there was a lot of pressure (on other operators) to reduce the voice component of the rates,” Rajan S Mathews, director general of Cellular Operators Association of India told

The Indian Express. With its launch Jio started offering bundled packs for a fixed time period, which included certain amount of data and unlimited voice services. This was soon replicated by other operators.

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Mathews also pointed out that since a significant number of users were still using feature phones without internet, they were paying for voice services as a separate item. Once the migration of feature phone users to smartphones picked up, they would, too, begin using bundled packs causing the average outgo by a subscriber on voice services to fall further.

“For people who are using smartphones, voice is free because they have access to data services. Only those using feature phones are separately paying for voice services and they are the ones who continue to pay a nominal rate for voice. Once they start migrating to smartphones, they will begin to enjoy voice for free along with bundled plans. We expect that the migration from feature phones to smartphones will cause the voice rates to continue dropping,” he said.

Concurring with Mathews, director of telecom research firm ComFirst, Mahesh Uppal also attributed the steep fall in voice tariffs to the entry of Reliance Jio, terming it a response by existing operators to aggressive pricing by the new entrant.

The decline in voice tariffs has been consistent with the earnings of major telecom operators in the country. According to a recent report by CARE Ratings, the average revenue per user from GSM services for the quarter-ending December 2017 fell on a sequential basis for sixth quarter in a row to Rs 79 per month. In September 2016, this was Rs 121 per month, while in June 2015 it was Rs 126 per month. India’s third largest mobile operator – Idea Cellular, which is in process of being merged with the second largest carrier Vodafone India — posted its sixth straight quarterly loss for the three-month period ended March 31, 2018.

Going ahead, Uppal said, companies would aggressively market data services to generate revenues. “The battle has moved from voice to the data market. Operators have to incentivise voice customers to use data. Most people are still unfamiliar with data services. They are not as simple as picking up the phone and making a call. So, data services will be aggressively promoted by operators in the short term. Apart from trying to bring people online, companies will also want people to spend more time online so that revenues are generated,” he said.