An analysis of the pre-paid mobile tariffs data suggest that operators across circles continue to withdraw discounts/ free minutes. The trend is visible across the board – New Entrants like Aircel, Tata DoCoMo as well as incumbents like Airtel,Vodafone and Idea have shifted their attention to Revenue Market share. The intensity of change has reduced in the seasonally weak quarter with fewer tariff hikes.
Indian operators are adopting a wait-and-watch approach and going slow on the tariff hikes. We find that in the months of Aug / Sep emphasis was on increasing tariffs on special tariff vouchers (STV) (packs which offer lower call rates for a fixed fee). The
action on minutes / seconds packs (packs which offer certain airtime against a fixed fee) was more subdued. WE also observe that industry is avoiding headline tariff changes.
We have also witnessed a few instances of tariff declines – which we see as tactical measures to counter seasonal weakness in volumes. However, the ratio of hikes to declines is still comfortably in favour of the hikes by a big margin. These declines are partial reversals of the hikes taken previously.
From June quarter results we see that Telcos report healthy 4-6% RPM increase QoQ with negligible MOU decrease. We believe that the RPM should continue to improve in the coming quarters and the only limiting factor on tariff hikes would be consumer elasticity, which has held out well so far.