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RCom sets 1 paisa SMS fee, extends the tariff war

RCom sets 1 paisa SMS fee, extends the tariff war
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First Published: Sat, Nov 28 2009. 12 41 AM IST
Updated: Sat, Nov 28 2009. 12 41 AM IST
New Delhi: Per paisa” may be the new buzz phrase of the telecom sector. Opening a new front in the tariff war raging across the sector, Anil Ambani-promoted Reliance Communications Ltd slashed its SMS (short message service) rates to 1 paisa per message on Friday. “All Reliance Mobile customers, regardless of the tariff plans they have for voice and data services, can avail of the 1p/SMS plan by subscribing to a standard tariff voucher of Rs11 per month,” a statement from the company said. Additionally, the firm offers a plan of Re1 per day for unlimited SMSes.
At present, the lowest SMS rate in the market is being offered by Tata Teleservices Ltd’s GSM-based mobile services provide, Tata Docomo, which charges 1 paisa per character. The average SMS rate in India is between 40 paise and 60 paise per message.
“This move will spell disaster, but it also shows that the worst is still not over. Cracks are starting to appear and the the companies are getting desperate to acquire subscribers to ensure that when consolidation happens in the next six-nine months they will get a good valuation,” a Mumbai-based analyst with an international brokerage firm said on condition of anonymity, as he is not authorized to speak to the media. “Reliance has not been able to get much traction from their Simply Reliance offer and the GSM (global system for mobile communications) offerings did well only till June. Now with the Dubai issue, funding is also short and if that does not get resolved, then the consolidation will happen within the next six months, otherwise within nine months.”
On 20 November, India’s largest mobile phone services provider, Bharti Airtel Ltd slashed its roaming charges by around 60% for both incoming and outgoing. The firm also launched “pay per second” plans for international calls on 24 November.
According to Bharti’s new roaming plan, mobile customers could make and receive calls across the country at 60-80 paisa per minute depending on whether they were calling within Airtel’s network or another network. India’s third largest mobile phone service provider by subscribers, Vodafone Essar Ltd, has also decided to match the 60% cut in roaming charges announced by Bharti. “The final nuances are being worked out. The reduced roaming rates will be announced by Saturday,” a Vodafone-Essar official told NewsWire18. The spokesperson for Vodafone Essar denied that the firm had anything to offer at present. On Monday, Tata Docomo, announced that while roaming, subscribers could receive and take calls across India at 1 paisa per second. The rate would apply across all 15 circles where the telco has launched GSM services, regardless of which network or type of phone the call is made to.
India’s telecom sector added 16.67 million mobile subscribers in October to take the total to 488.4 million mobile subscribers. Bharti still leads the pack with 113.21 million subscribers followed by Reliance with 88.21 million mobile subscribers. Vodafone Essar is close behind with 85.82 million mobile subscribers.
Tata Teleservices is at present the sixth largest mobile phone firm by subscribers with 50.66 million subscribers having added the maximum of 11 million in the last three months since the beginning of the tariff war.
NewsWire18 contributed to this story.
shauvik.g@livemint.com
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First Published: Sat, Nov 28 2009. 12 41 AM IST