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Why telecom operators are increasing tariffs now?


Both Airtel and Vodafone Idea have announced a 25 per cent increase in mobile prepaid tariffs over the last two days indicating that the party for Indian telecom consumers is over.

While mobile services were expensive in the initial days of wireless telecom services in the late 1990s, India’s mobile users enjoyed the cheapest tariffs in the world from 2002 onwards when Reliance Infocomm launched affordable services using CDMA technology.

Also read: Airtel prepaid plans to cost 20% more from Nov 26

Overnight, mobile tariffs dropped from ₹8 a minute to about ₹1. Subsequently, more operators entered the market and by 2008, mobile users were paying less than 50 paise for a minute call. The market was booming with operators adding 10-15 million new users every month making India a nation with 1 billion mobile connections. In a market where fixed-line telephone was hard to get, cheap mobile phone services came as a big boon to…

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