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REFILE-UPDATE 1-India's Bharti, Idea shares surge on call tariff hike hopes

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Tue Jan 15, 2013 5:55pm IST

(Removes redundant words from first paragraph)

* Bharti shares gain 5 pct, Idea gains 8.4 pct

* Speculation of voice tariff hikes lift shares

* Strong competition has prevented call tariff hikes

MUMBAI, Jan 15 (Reuters) - Shares in Indian mobile phone network operators Bharti Airtel Ltd and Idea Cellular Ltd surged on Tuesday on speculation that they may soon raise their prices for voice calls, several traders said.

Both companies declined to comment on the market rumours.

India's mobile phone market, the world's second-biggest by customers behind China, has not seen any real increase in call prices in the last three years after a vicious price war sent call prices tumbling in late 2009. Voice calls account for about 85 percent of revenues.

Companies including Bharti and Idea raised voice call prices in the middle of 2011 but then had to pare them back after losing market share to competitors.

But since then several smaller operators have either folded or cut back operations after a Supreme Court order to revoke licences gained in a disputed auction and market leaders such as Bharti, Vodafone Group Plc's local unit and Idea Cellular have long since been expected to increase call prices.

Bharti shares ended up 5 percent, their highest level since March 5, 2012. Idea shares rose 8.4 percent to their highest level since Feb. 4, 2008.

Shares in Reliance Communications, India's third-biggest carrier by customers, closed 2.7 percent higher. The company, which was the most aggressive in cutting rates during the price war, raised call prices in some zones last September. ($1=54.4575 Indian rupees) (Reporting by Abhishek Vishnoi and Manoj Dharra; Writing by Devidutta Tripathy; Editing by Greg Mahlich)

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