India's Reliance Communications Ltd. Tuesday said it has launched a per-second billing plan for all calls, following similar moves from its peers amid intensifying competition and price wars. The company will charge 0.01 rupees per second for all calls, including national long distance and roaming, it said in a statement. For long duration calls it will charge 1 rupee ($0.02) for three minutes, it said.
Reliance Communications' move follows a spate of similar announcements from peers including Tata Teleservices Ltd. and Bharti Airtel Ltd., which are expected to erode telecom companies' earnings, analysts said.
Brokerage HSBC Global Research said in an August report that if incumbent and new players adopt the per-second plan, it could hurt the sector's revenue by 10%-15%. It described such a billing plan as "disruptive" for the sector.
For Bharti it could result in a per-minute revenue fall to 0.35 rupees from 0.53 rupees now, the brokerage said.
However, some analysts feel that Reliance Communications, having already had significant impact from its 0.50 rupees per-minute billing plan, won't be further hit by the new one.
Reliance Communications reported average revenue per minute at 0.47 rupees in July-September.
Per-second billing was triggered by the entry of Tata DoCoMo Ltd., a joint venture between India's Tata Teleservices, and Japan's NTT DoCoMo Inc., which started offering such a billing plan in June.
"Tata has already mopped up subscribers to this plan," Nishna Biyani, analyst at Prabhudas Lilladher, said.
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