Mobile Service Charges Likely to Go Up Soon: Reliance Communications

New Delhi: Gaining confidence from a remark by the Telecom and Regulatory Authority of India Chairman that mobile tariff may rise, Reliance Communications has said it is looking at reducing discounts on mobile services from about 25 per cent at present to 15 per cent soon.

"Industry is also going through virtual consolidation and pricing power is coming back to the operator. The regulator has confirmed and gone on record to say that tariff may increase up to 9 per cent in a year. All these developments are helping investor in reposing their faith on future of Indian telecom sector," RCom chief executive Vinod Sawhny said on Thursday, while at the company's earnings call.

TRAI Chairman Rahul Khullar had recently said that there might be an increase in mobile services rates in a year.

RCom president and CEO for wireless business Gurdeep Singh said mobile services rates, voice or internet, are going to rise in the coming days and customers completing six-month in a scheme will be gradually move to new rates.

"We see in coming quarters tariff are going to be harder because of decrease in freebies in the network and also we need to upgrade certain consumers from below cost to serve to cost to serve by changing and modulating tariff," he said.

He also said companies will lower discounts they offer through various scheme which will lead to hardening of mobile tariffs.

"Our endeavor is to bridge gap between headline tariff and the pack tariff. Today they are at about 20 to 25 per cent discount. Going forward, we would love to bring them below 15 per cent. That is the position towards which we are heading," Mr Singh said.

Talking about expansion, Mr Singh said that RCom will start providing 3G services at pan-India level by end of current quarter by partnering with other companies in telecom circles where it does not hold 3G spectrum.

RCom posted an over 22 per cent increase in consolidated net profit at Rs 132 crore for the quarter ended June 30, 2014. It had reported a net profit of Rs 108 crore for the corresponding quarter a year ago.

RCom registered a marginal increase in consolidated income from operations at Rs 5,354 crore during the reported quarter from Rs 5,315 crore a year ago.