Cellular tariff war in the offing: Loop Mobile and MTS India announce attractive schemes

By Telecom Lead Team: Indian mobile market is heading for
another round of cellular tariff war. This time, the mobile tariff war will be
among new telecom operators. The downward revision in mobile rate is happening
at a time when the industry started showing slow growth in net addition of
mobile subscribers.


According to TRAI, wireless subscriber base increased
from 851.70 million at the end of June 2011 to 873.61 million at the end of
September 2011, registering a growth of 2.57 percent over the previous quarter.
The year-on-year growth over the same quarter of last year was 27.03 percent.


There are also fears about a lower than expected growth
in profit by top mobile operators in India.


Recently, Royal Bank of Scotland downgraded India’s
telecom sector to underweight from overweight citing greater regulatory risk,
potential impact of policy uncertainty on growth, increased competition on Reliance
Industries’ entry and likely consensus downgrades.


The bank has downgraded Bharti Airtel and Idea Cellular
to hold from buy and Reliance Communications to sell from hold. “We cut
EBITDA estimates for our telcos by 1-12 percent for FY13 and 4-13 percent for
FY14. Our EPS declines 3-30 percent in FY13 and 25-30 percent in FY14,”
RBS said, according to a report
in Economic Times.


Loop Mobile, a wireless service provider in Mumbai, has
launched free inter calling and SMS for prepaid subscribers for a lifetime in Mumbai.


Recently, Sistema Shyam TeleServices (MTS India)
announced its new tariff plan at 1 paisa per minute from MTS to MTS for its
pre-paid voice customers across North Bengal and Sikkim region. The offer is
available to both new and existing customers by recharging with Rs 99 and Rs 36


The Loop Mobile scheme enables an existing Loop Mobile
subscriber to refer unlimited number of subscribers and then avail free inter
calling and SMS between the entire group, a product feature not offered in
Prepaid till now. Further, the existing subscriber can earn 10 percent extra talk time based on
every new subscriber’s recharge for 1 year. Additionally new subscriber can get
free talk time 15 percent extra on every top up recharge done for a period of 1
year. This kind of a unique long-term rewarding and value enhancing proposition
is first of its kind in the category.


This Prepaid offer springs from our understanding of
mobile users’ needs in Mumbai. Subscribers are known to call a set of numbers
repeatedly and therefore in order to help them gain lifelong value on their
calls and SMS, this prepaid offer will help them make their usage virtually
free. Further, each referrer and referee will be rewarded with extra talk time
over a period of 1 year,” said Surya Mahadevan, COO, Loop Mobile (India).


Since Prepaid subscribers still constitute over 80
percent of any operator subscriber base, this kind of a closed user group offer
with free calls and SMS is a great benefit for this large user group. Existing
Prepaid subscribers would have to refer as many subscribers as they wish to
avail free inter-calling and SMS benefit for a lifetime. Each new referred
subscriber would have to get a special Member Get Member SIM card and do a
onetime recharge with Rs. 94. The new subscriber would have to share the unique
code on the application form and send an SMS to his referrer.


Recently, MTS India introduced
a cost effective plan at a time when the telecom industry is reeling under
pressure to increase margins and revenues.


“We have presented special tariff of 1 paisa per
minute proposition for our North Bengal and Sikkim region. This would empower
our existing and new pre-paid customers to stay connected with their loved ones
at the lowest tariff rates. I am confident that our customers will find this
proposition exciting and extremely beneficiary,” said Keshhav Tiwary, COO,
Kolkata & West Bengal Circles, MTS India.


Danish Khan
[email protected]