* Reliance Comm raises some call prices by 20 pct, cuts
* Mobile carriers yet to start increasing base tariffs
By Devidutta Tripathy
NEW DELHI, May 6 Reliance Communications Ltd
, India's third-biggest mobile phone carrier by
customers, has raised some voice call prices and further cut
discounts, extending price increases in the world's
second-biggest mobile phone market.
Until recently, operators in India's fiercely competitive
market have offered steep discounts to win customers, often
sacrificing margins, but rising airwave costs and heavy debts
have forced carriers to end that strategy.
As several smaller firms have either shut down or scaled
back operations in response to a court order, bigger companies
such as Bharti Airtel, Vodafone Group Plc and
Idea Cellular have cut discounts on voice calls,
effectively increasing prices.
Operators are likely to further cut discounts and free
minutes in order to boost revenue, analysts say. Last week, top
carrier Bharti Airtel, which withdrew discounts in January, said
it expected pricing to become more stable.
Still, firms will be less rapid to raise the so-called
headline, or base, tariffs - currently at between 1.5 paisa and
2 paisa a second - as an overt rise in prices could hit demand,
said Ankita Somani, a telecoms analyst at Angel Broking in
"I really don't see headline tariffs going up for the next
one quarter or so," she said.
A paisa is one-hundredth of a rupee, or around
two-hundredths of a U.S. cent.
Reliance Communications, which is due to report quarterly
earnings on Friday, said on Monday it is increasing calling
rates to 1.2 paisa a second from 1 paisa in some plans, still
below its base price of 1.5 paisa a second.
"With smaller operators shutting down or scaling down their
operations and easing off hyper-competitive pressures, this will
help pricing power move back ... and positively impact
profitability," Gurdeep Singh, Reliance Communications' head of
mobile business, said in the statement.
Shares in Reliance Communications, controlled by billionaire
Anil Ambani, have jumped nearly 50 percent this year on hopes of
more deals with Reliance Industries Ltd, run by Anil
Ambani's wealthier brother Mukesh, which is readying the launch
of a nationwide 4G network.
Reliance Communications shares were down 0.2 percent by 0729
GMT, marginally underperforming a broader market that
was up 0.1 percent.