Chennai, Feb 7: Pager companies are at it again. After yet another price war, the prices of pagers are slowly inching upwards.With the subscriber base nowhere close to the target of 1 million by the end of 1997, pager companies are back to increasing the prices and sustaining margins instead of depending on volumes to boost the bottomline.
Over the past two months, pager prices have increased by around Rs 500 in Chennai.
A single-line alpha numeric pager, which used to sell at Rs 2,800 in December, is now quoting at Rs 3,500. At the higher end, a four-line alpha numeric, which used to sell at Rs 3,800, now ranges between Rs 4,300 and Rs 4,400. And, the price range is more or less the same among all the competitors in the city.
Upcountry, the cost of the pagers is higher and hovers around Rs 4,500 for a single-liner and Rs 6,000 for a four-liner. And the hike has not been substantial but more in the region of Rs 100 to Rs 200 at the most.
This northward movement of prices is after the earlier boutof discounts the market saw from September to December. With market being sluggish, pager companies once again turned to lower pricing as a method of enticing consumers into their networks.
When contacted, an official in one of the city paging companies said the price movements were in tandem with the Indian Paging Service Providers Association (IPSA) regulations. But here one should keep in mind that IPSA had passed a resolution to check indiscriminate price wars more than a year ago, when the industry was going through a really bad patch. Initially, perhaps a year after paging was introduced in India, the market saw fierce price wars between competing companies, each wanting a bigger piece of the market. This resulted in profits taking a beating and the association ruled that the prices should be kept at `reasonable levels'. But in spite of this ruling by representatives of the industry, paging circles continued to be ruled by pricing strategies, though more covertly. This trend could be observed more inthe city paging circles while in upcountry circles the dust settled down.With the entry of state paging operators, prices again saw a southward movement, "perhaps due to an effort by the city operators to trade in on a price advantage against the wider coverage offered by the state operators," said paging industry sources. Whatever the reason, the discounts have not lasted for long this time and the prices are slowly increasing.
When contacted, a source at IPSA said price-stabilisation might be a show of solidarity by the industry, which has many favours to ask of the government.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
