New Year gift: Airtel, RCom won't raise SMS rates

The tariff war in the telecom industry is set to ring in good news on New Year's Eve with companies such as Bharti Airtel and Reliance Communications deciding against charging more for text messages on December 31.

For operators, occasions such as Holi, Diwali, Christmas, New Year and Independence Day spell an increase in SMSes and voice traffic and are, hence, treated as 'black out' days where they charge slightly higher SMS rates, irrespective of the tariff plan subscribed.

RCom has said it will maintain its special SMS tariffs even on December 31. RCom had recently announced new SMS tariffs allowing subscribers to send an SMS for 1 paisa and unlimited free SMSes per day for a daily rental of Re 1.

Bharti Airtel also said the company would maintain regular call and SMS tariffs on December 31, as subscribed to by the user.

But Vodafone and Aircel subscribers will end up paying Re 1 for every local message and Rs 1.50 for a national SMS, irrespective of any special SMS tariffs applicable as per the subscribed monthly plan.

Aircel will extend the 'black out' SMS rates to January 1 too, with the exception of 25-paisa rate for each SMS (local and STD) in Chennai and Rest of Tamil Nadu subscribers on January 1.

Even price-conscious operators like Tata DoCoMo will charge 50 paisa for local and national SMSes. The operator will continue to offer its recently introduced diet SMS plan to subscribers, where a user pays 1 paisa per character for the first 15 characters.

Regardless of the subscriber tariff plan, SMS rates of most operators on December 31 would be between 50 paise and Rs 1.50. Analysts suggest telecom companies stand to rake in more than Rs 100 crore (Rs 1 billion) through text messages exchanged on December 31 and January 1.

Last year, India's 350 million mobile subscribers sent over a billion text messages.

Voice calls much cheaper

Despite higher SMS rates, Nishna Biyani, telecom analyst at Prabhudas Liladher, estimates it would not make much difference to the operator's kitty.

"At present, voice constitutes up to 90 per cent of the operator's revenues. So, charging Re 1 for SMS will not impact the operator's average revenues per unit significantly," he says. Further, he believes users could also switch to voice calls for greetings, as call rates continue to remain cheaper than SMS.