Virgin slashes mobile call credit rate

Hit by the telecom regulator’s decision to reduce termination charges, youth-centric telecom operator, Virgin Mobile, has cut the 10 paise credit per minute for every incoming call by half. All new customers will get only 5 paise per incoming call.

The 5 paise benefit for every minute’s incoming call will be credited now only after six months with Virgin. Existing customers in this category will get the credit from May 1.

The 10 paise a minute offer was Virgin’s key marketing plank to woo the youth when it launched in March last year. It was able to do this by taking advantage of the termination charge other operators pay for every call terminated on its network. Last month, the Telecom Regulatory Authority of India reduced this charge from 30 paise a minute to 20 paise.

Speaking to Business Standard earlier, M A Madhusudan, CEO, had said that Virgin would always stick to its unique selling point of paying the customer for incoming calls and would never do away with the scheme entirely.

He said, “Importantly, despite the changes, we will not make it zero, so that customers continue to get the benefit since even today no one (other than us) offers this service.”

Agreeing that margins might get affected, Madhusudhan said, “If you look at our overall calls, initially, the number of incoming calls was more. As the subscriber base has grown overall, it has almost become 50-50. So, if my 30 paise has gone down, my outflow has also increased by the same. So, in terms of the financial impact, it is not a big negative.”