Reliance Communications, the third-biggest mobile phone carrier has increased the base call price to 1.5 paise per second from 1.2 paise, the company said in a statement. The company has cited rise in costs and lower competition for the increase in call rates.
Observers say the hike in call rates has come close on the heels of a court order revoking permits of several smaller rivals. Smaller companies closing down their shutters will significantly reduce competition in the cut-throat Indian market. Soon operators such as Bharti Airtel and Vodafone are likely to raise call prices.
"We have seen on ground competition tapering off. Hence we need to restore back the price," Gurdeep Singh, chief executive of Reliance Communications' mobile business, told Reuters.
"From our experience in the four zones where we have implemented it already, this is very much sustainable. We see another round of tariff hike in the next one year," Singh added.