Our new channel checks reveal that headline tariffs continue to remain stable in the sector. However, in recent weeks we have seen evidence of operators resorting back to selective promotions on a tactical basis. Such promotional offers are not to be written off—since our urban subscriber survey showed that nearly half of subscribers use such
promotions. However, since the new promotional schemes are specifically targeted at select subscriber groups, we would not call it a trend yet.

In any case, these observations give strength to our belief that tariffs in the sector are not necessarily suppressed (due to competition), and probably close to levels which would have been reached even in an orderly, non-competitive market.

Promotional offers visible in recent weeks
After the tariff increases (both headline and below-the-line) that we saw in Jun-Aug 2011, our channel checks show a fairly stable tariff situation ever since (see our notes of 7 Sep 2011 and 7 Dec 2011).

Our fresh channel checks recently indicate that headline tariffs remain stable (at 1.2 p/sec or 72 p/min). However, operators have started playing with promotional schemes (special tariff vouchers or STVs) again—albeit in select areas.