Decrease in Tariffs

• Lower interconnection tariffs combined with the continuing decline of the price of entry-level handsets have expanded India’s addressable market, helping encourage growth among the lower segments.
• With voice tariffs at a low level, operators are looking at the usage of value added services to boost their ARPU levels.
• Partly driven by the need to grab as many new users as a telecom company can lay its hands on, and partly getting pushed by the country's regulatory authority, the TRAI, to reduce telephone call rates, Indian telecom players are engaged in an open war over tariffs and subscribers that many experts fear may well spell problems for the sector.
• But the price of this explosive growth is that, the downward trend in ARPU is expected to continue for the next five years at the very least. Some even suggest that ARPU is set to fall even more to $5 which is currently $10 in India
• From 2000 through late 2003, the tariffs that Indian operators charged for contract service dropped as much as 90 percent, falling from Rs 4.00 ($0.089) per minute to Rs 0.40 ($0.009). Led by Reliance Infocomm, the same is now happening for prepaid service, as well.
• After deploying 3G technology and to be player in market, operators should maintain such tariffs to be in profit.