Telecom tariffs may fall 25pc in 2009

MUMBAI, INDIA: The mobile tariffs in the world’s cheapest telecom market are set to fall further by at least 20-25 percent during the year, more so due to increasing number of telecom operators and infrastructure over capacity, reports Business Standard.

With local call rates at 33 paise (BSNL) and STD rates at 50 paise per minute (most mobile operators), the country has the lowest telecom tariffs in the world.

To begin with, the industry is expecting the new licensees (including Loop Telecom, Datacom Solutions and Unitech Wireless) to commence operations in this year itself. This coupled with the expected expansion of operations of existing players like Aircel Cellular, Idea Cellular, Tata Teleservices and Reliance Communications (RCom) will have an impact on the mobile tariffs.

Another reason is an expected overcapacity in towers. The Telecom Regulatory Authority of India (Trai) estimates that the country needs around 300,000 towers by 2010 to support the massive 10 million monthly subscriber additions.

The recent slash in termination charges from 30 to 20 paise for domestic calls, which the operators have begun passing on to the subscribers, is also pulling tariffs down.