Mobile price wars to end in 3-5 years: TRAI chief
12 Sep 2012
The cut-throat pricing of mobile call rates, which has eroded the profitability of telecom companies, may end in three to five years, Rahul Khullar, chairman of the Telecom Regulatory Authority of India, said on Tuesday.
"In the next three to five years, we are going to see industry margins under pressure, companies looking around for cash to tide them over liquidity crises and thirdly you are going to see consolidation," Khullar said.
"As we start seeing consolidation, you will come to a stage when all these trends of predatory pricing will stop," he said.
Rather than cutting call charges, which was the dominant practice about two years ago at the height of the price war, telecom operators are now wooing customers with freebies like the same amount of talk time for a lower price or more talk time for the same price.
The TRAI chairman cited predatory pricing as one of the key reasons for the deteriorating condition of telecom industry.
Khullar said that the price war is spoiling business in the industry. "When in competition you spoil the whole business of the industry then it is not competition, it is competitive destruction. If you murder each other then is anyone going to gain?"
