Telecom Tariffs

THE CHANGE
Introduction of the 'one paisa per second' tariff plan for mobile phones by Tata Docomo. It first took off in Tamil Nadu in June 2009.

THE INTENT
Being a late entrant in the GSM arena, Tata Docomo came up with this carefully crafted strategy with the aim of capturing a decent market share. What was implicit in this intent was the competitive price advantage that would unfold for the consumer. As Ratan Tata, chairman, Tata Sons, said during the launch, "This is truly a moment of triumph for the consumer…"

THE IMPACT
Tata Docomo's revolutionary idea helped unleash a new era in the price war among telecom companies. In fact, the Telecom Regulatory Authority of India (Trai) was so enthused with this novel idea that it pushed other companies to implement it too.

Almost all of them agreed, not because of Trai's diktat, but to ensure that their subscribers did not stray into rival territory. Some of them bent over backwards. So, MTS now has a 1 paisa per 2 second plan, and Vodafone has launched a Rs 105 a month voucher, which enables calls to be made at only 10 paise per minute.

The trend has also carried over to SMS services, which hadn't seen much of a tariff war till recently. Tata Docomo now has a 1 paisa per character plan, while Reliance Communications allows you to send unlimited messages for a rent of Re 1 a day. Tata Docomo obviously doesn't want to lose steam as it recently launched the pay-per-site plan, under which smartphones can log on to fixed Websites. For Rs 25 a month, you can access three mail accounts or five networking accounts and get free 500 MB of data usage.

Number Portability The most anticipated measure, it will allow you to switch telecom operators while retaining your existing number. Trai announced four deadlines this year, but failed to meet all of them.

What was also impressive about Tata Docomo's initiative, and one that surprised many consumers, was that it ensured there were no asterisks pointing to a 'conditions apply' footnote in its plan.

Ironically, however, over the long term, the one paisa per second plan isn't really the cheapest offering (see Not So Cheap Trills, January 2010). But for short-term users, such as children, such a plan has indeed been a boon.

And, of course, as Ratan Tata said, "It will create a paradigm shift in the overall telecom experience for the customer." It sure has.
 

THE 3G INITIATIVE The auctioning of the 3G spectrum has created a lot of buzz among mobile phone users. Currently, only BSNL and MTNL are providing 3G services. However, within a few months, other telecom companies will start rolling out their plans which will, hopefully, make rates more competitive. The buzz is justified because 3Genabled phones will have faster connectivity and will allow access to the Internet. In fact, you could even use your phone as a modem while connecting it to your computer. So, watching the latest financial news, accessing your bank account and trading in stocks is set to become much faster and smoother. Videocalling will also be possible, which means that you could go through documents lying at home or on your accountant's table. Music downloads will also become faster. From the current 7-10 minutes it takes to download music, the time will drop to 2-3 minutes. Now, if only the plans were to be rolled out faster.