Bharti Airtel Raises Its Mobile Call Rates

India Telecom shares rose as much as 16 percent of the teams on Monday, after Bharti Airtel raised a number of telephone charges, a move that could mark a turning point in the market, where mobile call rates are among the cheapest in the world.
India's mobile market is among the world's fastest growing major economy in the number of subscribers, but strong competition is ignited by the price war in the past three years, which has squeezed margins for operators.

Bharti said the price increase, which is India's leading mobile operator, has reported five straight quarterly decline in net profit, has been seen as an important step to revive the fortunes of the industry, analysts said.

"We see an increase in the tariff market leader Bharti as a fundamental change in the sector is taking our concerns about commodity prices lift the industry," said telecommunications analyst at Religare.

It is expected that the example of Bharti's main competitors in the coming weeks.
"We believe that such an increase is sustainable and expects Bharti to replicate the trend for all categories of products within the next few months, and circles. In addition, we expect the competition to follow. It turns out that the process has already begun," says Rajiv Sharma, telecoms analyst at HSBC.

Bharti is a move was welcomed by investors, who went on a spree to buy telecom shares on Monday, pushing up the whole sector.

Shares of Reliance Communications, the second largest operator by subscribers, and the flagship company of Anil Ambani business empire, rose 14.9 percent, having increased from 16 percent in early trading on the Bombay Stock Exchange. In the meantime, rose 5.37 per cent of Bharti and Idea Cellular, the fourth largest carrier, rose 7 percent. Vodafone is not listed in India.

More than 850m subscribers in May of the Indian companies have historically focused on expanding the user base to increase profit. Since 2009, cut illegal companies prices to a record low level in the second half paisa - 100 paisa is the rupiah, or just over 100 percent of the U.S. - the subscriber number has grown 46 percent, but revenues have risen only 13 percent.

But because of customer growth has slowed over the past quarter, companies are forced to change strategy to keep revenues growing, analysts said.

"The decline of the decline in subscriber additions and subscriber net addition of new players to emphasize that the game has changed to increase the share of wallet, clocking in subscriber numbers," says Sharma is HSBC.

India's six largest operators paid between $ 1.8 and $ 2.6 in 2010 to win the third-generation mobile phone spectrum, as they had hoped to offer more value and high revenue-generating applications. But analysts believe India will be several years before the 3G market will generate significant revenues to increase their overall margins.