AT&T-BPL : they merge and still fight

Sandesh Prabhudesai
29 June 2001  

The mobile tariff war is just not on but has intensified between AT&T and BPL in Goa and Maharashtra, no matter the biggest mobile service providers have merged for the rest of India, to create country's biggest joint venture worth $ 2 b.

As per the MoU, Goa-Maharashtra circle will not be part of the JV until BPL sells its licence to the third party. Except Mumbai, the rest of Maharashtra and Goa are managed by AT&T and BPL Mobile Cellular Ltd, separately.

Vinay Agarwal, the COO of BPL Mobile Cellular Ltd, admits that negotiations are going on with other leading operators in the country, but declines to divulge any further information in this regard.

However, while the MoU was being signed in Mumbai, both the JV partners were busy in Goa and Maharashtra to win over new clients, offering them much cheaper tariff than earlier.

In fact newspapers are flooded with advertisements by both the BPL as well as AT&T offering free connections, incoming free facility and even no rentals, obviously for different plans.

Going little ahead of AT&T, the BPL group here has now come out with a new scheme, where a cellular user need not pay any tariff for incoming as well as outgoing calls, provided the monthly rental is paid at Rs 1750.

The BPL, who stands second in terms of subscriber base here, has even cancelled connectivity charges while offering only Rs 1000 as refundable deposit. There is a scheme floated without charging monthly rental of Rs 50, as the BPL dealers have come forward to bear the rental charges.

Both BPL and AT&T have also announced new plans soon after the merger, charging only Rs 2 for incoming as well as outgoing while charging monthly rental of Rs 540. Another such plan with a monthly rental of Rs 295 charges only Rs 2.25 for incoming and Rs 3.90 for outgoing calls.

While offering most of these promotional schemes for six months or one year, the dealers have been telling customers that the tariff is bound to reduce further within three months, as the Bharat Sanchar Nigam Ltd will start operating its cellular service.

Agarwal admits that the sell-out in Goa and Maharashtra would also include the customer base of the BPL, besides its infrastructure and the manpower. The question however arises why BPL is widening its customer base by slashing down the prices when it would ultimately help a new player against the JV partners including the BPL.

While AT&T officials are silent on the issue, BPL COO Agarwal finds nothing wrong in passing on greater benefit to subscribers as it continues to be a separate entity. "Obviously it will continue to maintain its competitive stance against the other operator", he quips.

People in the cellular market however feel that the BPL is trying to widen its customer base in order to get better deal while selling out licence. Whatever may be their economics, the cellular user however is extremely delighted over unbelievable offers being made to them, even before the BSNL has stepped in.

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