Bharti slashes mobile roaming charges, shares fall

Bharti slashes mobile roaming charges, shares fall
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First Published: Fri, Nov 20 2009. 03 51 PM IST
Updated: Fri, Nov 20 2009. 03 51 PM IST
New Delhi: Bharti Airtel launched yet another new billing plan on Friday, slashing mobile roaming rates by nearly 60% and signalling a tariff war in the world’s fastest-growing wireless market was far from over.
The announcement accelerated losses in the shares of Bharti, the country’s top mobile operator. The stock fell as much as 3.3% but trimmed losses to 2.7% at Rs284.90 by 0825 GMT in a Mumbai market that was up 0.3%.
The price war, aimed at grabbing new users ahead of fresh entrants waiting in the wings, has raised concerns about telecom firms’ profitability. Four new firms, including ventures funded by Telenor and Etisalat, are set to start services this year adding to the existing 11 operators.
Bharti’s market value has slumped more than a fifth this year to about $24 billion and its stock is the second worst performer in the main index that has risen about 72%. Rival Reliance Communications has fallen about a quarter in 2009.
Bharti, whose about 115 million users account for more than 23% of India’s total mobile subscribers, in September cut call charges within its own network to 50 paise (US 1 cent) a minute and in October launched a low-profit per-second billing plan, reacting to competition.
Tata Teleservices, the No. 6 operator, was the first to launch per-second billing, deviating from the industry norm of per-minute billing. The offer was a roaring success and the firm has topped the new signings for three months in a row.
Bharti’s latest offer will allow users to recieve calls at 60 paise a minute while roaming, and they can make calls at 60 paise a minute within the Airtel network and at 80 paise a minute for calls to rival networks.
Analysts say Bharti still charges about 8-10% higher than Reliance’s call prices.
Bharti has said it would be competitive in pricing but had no intention to match the lowest price in the market.
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First Published: Fri, Nov 20 2009. 03 51 PM IST
More Topics: Bharti | Roaming charges | Telenor | Etisalat | Telecom |