Comments on: Local Calls 10 paise and STD at 25 Paise – A Raja asks Telecom Companies

By: Madhav Shivpuri

Madhav Shivpuri — Thu, 05 Nov 2009 04:57:27 +0000

As an investor I wouldn’t want to bet a dime on any telecom company given the pricing war and the level of regulatory intervention. So, I don’t see any sense in Singtel increasing their share in Bharti unless they want to make up in volume what they have lost in margin.

As evidently basic telephone call has become a commodity I guess the other area of competition or differentiation that telecom companies could be focussing is on VAS. Arun, would you want to do post on the VAS services and across telecom companies in India?

By: akhilsethi

akhilsethi — Wed, 04 Nov 2009 17:32:00 +0000

I like the idea of 10-second Audio Ad, but in case of emergency calls where one need to get connected quickly, it will be very frustrating.

Companies have to come-up with some innovative steps to generate profits to survive in this very-competitive industry.

By: Madhav Shivpuri

Madhav Shivpuri — Wed, 04 Nov 2009 09:24:52 +0000

I agree with Pooja that whenever there is competition among companies (suppliers), the customer (buyer) stands to gain.

Some questions on my mind are:
- At what cost will this price slashing come? What services will be made ala carte?
- What customer support can a company offer if they are making less than peanuts?
- For companies to be profitable or provide a certain pricing, would they then tie to a basic monthly usage (revenue) or resort to menacing advertising (like a 10 second audio ad before for each call you make?)
- If everybody over uses their mobile phones what will be the burden on the telecom traffic and thus fall in quality of service?

May be my thoughts are just random… what do you think?

By: akhilsethi

akhilsethi — Wed, 04 Nov 2009 09:23:00 +0000

Its really surprising that A Raja is still thinking of these call rates (10p and 25p) as already the current call rates ( per second billing (introduced by Docomo)) is lowest. I am really interested in knowing from where the profits will come up for these telecom companies. Already the Call rates are the lowest in the world and avg. ARPU is also very less, its a question that whether these companies will be able to survive or not..??

By: Pooja Gupta

Pooja Gupta — Wed, 04 Nov 2009 04:12:05 +0000

A popular economist rule – consumers benefit the most in a purely competitive market. Telecom sector surely stands by this rule.

By: Philip

Philip — Wed, 04 Nov 2009 03:47:36 +0000

after a lot of blood letting the weaker ones will collapse and be taken over. A consolidation is necessary for the industry and it will come soon.

Till then, this price madness will continue. I see more madness post the 3G spectrum auction (as and when it happens).