SMS rates set for freefall, now at one paisa

Post the tariff war on voice services, it is the SMS rates that are now being slashed. In the extended telecom war, Anil Ambani-owned Reliance Communications has initiated the battle of SMS rates.
The company has introduced one paisa per SMS scheme for its pre-paid as well as post-paid subscribers on GSM and CDMA. All Reliance Mobile customers, regardless of the tariff plans they have for voice and data services, can avail of the one paisa per SMS plan by subscribing to a standard tariff voucher of Rs 11 per month.
Mumbai-based Reliance Communications has a combined GSM and CDMA subscriber base of 90 million under the brand name Reliance Mobile.
Most mobile operators, including Bharti Airtel and Vodafone, generally offer SMS at one rupee for local and Rs 1.50 for national SMS.
Commenting on the tumbling SMS rates, Mahesh Uppal, telecom analyst and director, Con First India, says, “It was very much expected that after voice it will be the falling SMS rates since it costs very less for the operators.”
Uppal further says that voice has certain capacity to hold calls. He feels the small players will be at a loss as they may be on the receiving end. The cash flow of these operators might get affected as they do not have the ability to raise investments.
Value added services, including SMS, accounts of about 10 per cent of the total telecom revenues of which SMS has a major share. Other players too are likely to follow suit soon. The voice calls in India have fallen to 1 paisa per second, touted to be the lowest in the world.