Telenor India unleashes aggressive call tariff plan

NEW DELHI, INDIA: Telenor's India unit on Friday launched a new traffic-based discount plan for mobile calls that could see prices falling, the latest salvo in an ongoing price war in the world's fastest-growing mobile market.

The company, one of the newest entrants in India's highly-competitive mobile sector, said it would offer discounts ranging between 5 percent and 60 percent depending on the traffic on the network. The amount of discount offered would be different for each cellphone tower and change on an hourly basis.

The firm would allow calls at as low as 20 paise a minute.

"In a market this competitive, differentiation will be key to success," Stein-Erik Vellan, managing director, of the Telenor unit that operates under the Uninor brand name, said in a statement.

India has added mobile subscribers at a monthly average of 16 million in the past one year, but call charges have fallen sharply due to a price war among mobile operators to add subscribers faster than rivals and to gain market share.

No. 5 mobile firm Tata Teleservices last year introduced a new per-second billing system, deviating from the industry practice of per-minute billing, and forced bigger rivals including Bharti Airtel and Reliance Communications to launch similar plans.

Telenor owns 67.25 percent of the Indian unit which operates in eight of India's 22 telecom zones and has licences for the remaining. Indian real estate firm Unitech Ltd is Telenor's partner in the venture.

As of end March, Uninor had 4.3 million mobile users, or 0.7 percent of the market of 584 million. It launched mobile services in December.

At the top end of its "dynamic pricing plan", a one-minute call would cost maximum 50 paise, Uninor said, adding it would initially launch this plan in three of the zones it operates.

Rohit Chandra, the company's executive vice-president of operations, said the new tariff structure would lead to better network utilisation and that they would pass on savings on this to customers, expecting it to become an industry practice soon.