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Tata Tele plans endless talktime for Re 1

Created by : Sonal Singh, Project Manager, Nortel Networks  | 09 02 2009 08:15:58 +0000
Industry : Telecom/ISPFunctional Area : Strategy Execution(Strategy & Execution)
Keywords : tata tata docomo cdma docomo tata indicom tata tele tata teleservices per call charges
Activity:  433 views;  last activity : 07 06 2010 20:18:09 +0000

Talking on your mobile phone  just got more cheaper than ever people, just read on to find out more. Tata Teleservices is going to introduce what can be termed as a Revolutionary concept and major setback  for other telecos, with the company deciding to do away with the current pulse-system which is being used by all other telecom providers, but TATA has instead said that it will bill its customers on a per call basis which means, calls made by Tata Teleservices’ will no longer be charged on a per minute basis.


http://www.4dindia.com/images/clients/tataIndicom.jpg

These duration free calls, which are only available for its pre-paid CDMA customers, will be charged at Re 1 per local call and Rs 3 for every STD call. To simplify it more a local call will cost only Re 1 even if the customer were to speak for two hours while an STD call to any network in the country will come at Rs 3 irrespective of its duration.

TATA which has always come up with products which are customer centric and more in a way targetted at the middle class India, which is the highest in numbers interms of population, even the recent DOCOMO from them was a success in that regard. But then these plans are available for the CDMA phones from TATA and not the GSM sets what most of them are having.

What do you think will this plan from TATA tele Revolutionize Indian telecom space??  And as a consumer would you go for this kind of an offer?

  
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If TATA has decided to adopt a 'Single Fee' per call regime instead of the current “Measured Rate” system of charging; I would say it is the right business decision which the service providers should have taken long back.
Many telecom service providers (Ex: ETISALAT, UAE) give local call free and compensate it with the revenue from Long Distance calls, VAS and Data services. Basically, the trick lies in bagging higher volume in calling rate (number of calls per phone) allowing higher talk time and reducing per call charge to maintain the ARPU. However, It can be done for calls between phones under own network. The success of the product plan depends on the extent of the service provider’s footprint locally and across the country. Of course others also will follow suite, and therefore, on the whole the users will be the main beneficiaries. However, Call Traffic volume at any point of time being the product of Number of Call Incidents and Average Call Duration during that period, the quantum of equipment and network will increase multifold and hence the CAPEX and OPEX. Therefore, the service providers will have to tread cautiously, striking the right balance, to ensure revenue based on investments.
P. A. Paul, Ex: V.P. Technical Sales, SIEMENS (SPCNL),
G.M & SMT TBG BPL Mobile / TES (I) D.O.T India

If TATA has decided to adopt a 'Single Fee' per call regime instead of the current “Measured Rate” system of charging; I would say it is the right business decision which the service providers should have taken long back.

Many telecom service providers (Ex: ETISALAT, UAE) give local call free and compensate it with the revenue from Long Distance calls, VAS and Data services. Basically, the trick lies in bagging higher volume in calling rate (number of calls per phone) allowing higher talk time and reducing per call charge to maintain the ARPU. However, It can be done for calls between phones under own network. The success of the product plan depends on the extent of the service provider’s footprint locally and across the country. Of course others also will follow suite, and therefore, on the whole the users will be the main beneficiaries. However, Call Traffic volume at any point of time being the product of Number of Call Incidents and Average Call Duration during that period, the quantum of equipment and network will increase multifold and hence the CAPEX and OPEX. Therefore, the service providers will have to tread cautiously, striking the right balance, to ensure revenue based on investments.

P. A. Paul, Ex: V.P. Technical Sales, SIEMENS (SPCNL),

G.M & SMT TBG BPL Mobile / TES (I) D.O.T India
By P. Abraham Paul, MD FCOMNET  09 03 2009 04:53:39 +0000
 
Top Argument
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"Basically, the trick lies in bagging higher volume in calling rate

(number of calls per phone) allowing higher talk time

and reducing per call charge to maintain the ARPU. However, It can be done for calls between phones under own network. "... quoting what Mr. Paul said!!

This is what I am always afraid of, the unwritten statements that need to be written to make a service provider true to its fraternity!! This is where disparity comes in and customers switch loyalty. On the face of it, the scheme is amazing and would surely ask people to change LOYALTY. But the fine lines that are always marked with asterisks are the ones that need to be told to the consumer first!!

Anyway its a matter of business and as they say "everything's fair in the game of love and war".. its a war of survival out there!!

Thanks for the referral Sonal!!
By Makrand Bhave, Marketing & MICE, WIZCRAFT International  09 03 2009 02:59:44 +0000
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0

this is a new revolution in telecom industry, because of this teriff all the serious customer will go for this plan
By Arun Narang, Head of the Department, TATA TELESERVICES LTD.  | 09 09 2009 07:17:20 +0000
1
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This is a welcoming plan from an user's perception. I see it as a market catching strategy as the provider will have a reduced profit while increasing it's customer base. Will this stay longer ?
By shersks , Network Designer, TATA COMMUNICATIONS  | 09 05 2009 18:32:32 +0000
1
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There is nothing new in charging per call instead of per minute. If you dig your memory back to a decade ago, our own BSNL used to charge on per call basis. It was the entry of these Mobile Operators like Maxtouch (Orange, Hutch & Now Vodafone) in India which forced the Indian Telcos & Govt. to switch to per minute regime & in the game they have made billions of rupees (Obscene profits) by charging exhorbitant per minute rate of Rs. 32 + landline charge for every outgoing call & Rs.16 for incoming calls. But now the structure of rates have changed due to more entrants / competition. It is about time that all telcos turn to per call regime irrespective of it's duration.
By Purshottam Jagiasi, Head/VP/GM-Marketing, Aarvi Encon Pvt. Ltd.  | 09 03 2009 04:53:46 +0000
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Why not? People today want cheaper rates. Both STD and local. This decision of TATA indeed will attract many people towards him. So, it is very profitable decision taken...
By Radha Sundaram, Sales/BD Manager, Bharti Airtel  | 09 02 2009 13:08:09 +0000
2
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I think this will indeed do a whole lot of good for people who spend most of the time on their mobile phones the only disadvantage here is the CDMA, but then to go away with the pulse system and to charge on a call per basis is itself a great strategy, i see not hidden charges kind of a thing done by Tata tele....and indeed this new concept will have many takers, who will not want a phone where they can talk for hours and just pay 1 Rupee for that......I guess this will be a success.........would like to know others view on this new strategy from TATA.
By Sonal Singh, Project Manager, Nortel Networks  | 09 02 2009 08:23:24 +0000
1
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This plan from Tata Indicom is not functioning as they promised. First it was advertised wrongly as talk endless and the conditions specify it is Rs 1 for local and Rs 3 for STD calls with a cap on call duration at 10 minutes. This was never disclosed in the advertisements.

But the trick is most of my calls to STD networks get automatically disconnected after 3-4 minutes. This is blantant cheating. I am using 7-8 different mobiles in my office and home and none of the networks' calls get terminated before the caller or the receiver disconnecting.

Shocking unethical practice from the house of TATA.

 
By Prasad PN, Zonal Sales Manager  | 10 29 2009 15:03:58 +0000
1
0

This makes Perfect Business sense for at least Tata Indicom- CDMA. Few points in support:

1. Tata Indicom is most lagging telecom operator in terms of subscribers despite a big brand name. Over the years, TATAs have not been able to gain market share.

2. The number game for Telcos rests on ARPU these days. Moreover, the percentage of post-paid subscibers in network is miniscule. This scheme ensures atleast a ARPU of Base Monthly Charge (30) + Minimum one STD call per day (90) + Minimum 5 local calls per day (150) = INR 270.. which is a good pre-paid ARPU by all standards.

3. Good market strategy to churn out pre-paid subscribers with heavy talk volume/usage. Too little too late may be, but worth a try before TATA is ultimately able to decide something about its CDMA investment and Telecom roadmap.

Few points to caution:

1. As mentioned, this makes sense with own network calls. But the average call duration needs to be closely monitored, because in any case TATA will have to pay Termination charges to other networks which are generally on per minute basis and will be charged irrespective. As per my rough estimate, anything less than 15 minutes average is profitable; considering CAPEX is a SUNK cost.

2. This might have some impact on recently launched TATA DOCOMO business. Not sure how it impacts the overall profitability for TATA congomolerate.

3. Finally, the general feeling amongst customers for CDMA is not very good. In fact worsened after both Reliance and TATA have launched GSM services. The success of this customer centric scheme would depend a lot on willingness of new customers to invest on a new CDMA handset and of-course CDMA loyalists to stick on to CDMA till TATAs and Reliance continue to offer it.

Cheers
By Anshum Dua, Core Lead, Managed Services  | 09 08 2009 10:21:01 +0000
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