Reliance Communications raises call prices by a quarter in four circles
21 Sep 2012
Reliance Communications Ltd, the country's third-largest telecom operator, raised call prices across four telecom circles and intends to extend the hike to all circles within a month.
Following the news, the company's share prices rose to nearly a two-month high.
"RCom has increased the base tariff by 25 per cent to 1.5 paisa per second from 1.2 paisa per second as the competitive intensity tapers off and input costs rise. The move will help improve topline revenue and operative margins per user," an RCom spokesperson said.
RCom hiked base call price to 1.5 paise a second from 1.2 paise, citing rising costs and lower competition. The company has increased tariffs across Madhya Pradesh, Himachal Pradesh, Gujarat and Bihar.
Voice calls account for about 85 per cent of the telecom industry's revenues.
Reliance Communications, with net debt of $6.4 billion, has underperformed major rivals in operating performance.
The recent hike in diesel, which is used to run generators for generators for telecom towers, prices, steep increase in spectrum charges and high competition were eating into the revenues of the telecom companies.
Other operators in the country are likely to follow suit.
