The telecom operator has increased calling rates for local and STD mobile calls to 1.20 paise / second from 1 paise / second. Call rates have been revised for all local and STD landlines to 1.5 paise / second.

The increase in call rates is happening at a time when new mobile license holders are announcing new schemes with lower rates to attract new cellular customers.

Almost 5
percent of Vodafone customers are post-paid customers and they contribute
majority of the operator’s revenue. Vodafone India, in September 2011 quarter, reported
service revenue growth of 20.1 percent at 2,095 million pounds, reflecting
improving underlying growth boosted by new SMS termination charges in the
Indian market.

Following Vodafone’s
increase in mobile calling rates, other main operators are likely to follow
suit. Many operators have indicated that the current mobile rates are
non-sustainable for the viability of the telecom business.

Many
operators are under to pressure to increase tariffs. For instance, Vodafone
India’s margin in Q2 FY 2011-12 fell slightly despite strong top line growth as
a result of rising commercial costs and the dilutive impact of SMS termination.

The
substantial improvement in performance was mainly driven by a 25.5 percent
increase in the customer base, strong growth in incoming and outgoing voice
minutes and 66.1 percent growth in data revenue.

Growth
also benefited from operators starting to charge for SMS termination in Q2. At
30 September 2011 data customers totaled 27.5 million, a year-on-year increase
of 142 percent. This was driven by an increase in data enabled handsets and the
impact of successful marketing campaigns.

The
company in its financial report observed that while the Indian telecom market
remains highly competitive, the effective rate per minute is stabilizing as
operators increase headline voice tariffs and focus on promotional offers. 

Encouragingly,
we are starting to see some of the price increases now holding in the market,
so some benefits from pricing.  Number of
minutes year on year, we are up 22 percent on sequential quarters.   Data has been another area, again, of focus
here, so a 62 percent increase in the data revenues, 28 million users, which is
about 19 percent of the total customer base now using data products,” according
to Vodafone.

During the
quarter, EBITDA grew by 14.8 percent driven by the increase in revenue and
economies of scale, partially offset by higher customer acquisition costs and
increased interconnection costs.

Voice
revenue of Vodafone India was 1,621 million pounds, messaging revenue 107 million
pounds and data revenue 176 million pounds. 
  

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