A pragmatic approach on Telecom tariff

The TRAI and the Service providers should have pragmatic approach about the Telecom tariff in India. Telecom is one of the basic needs to push social and economic development and growth in a developing country like ours. To enable this, the basic telecom facilities need to be available, accessible and affordable to every one across the country. 

The prospect of happening this depends on the business viability of various service providers. While govt. was the service provider, the cost of loss making rural telephony service was cross subsidized with urban revenue. Also there use to have a telescopic charging, means more the usage the higher was the call charge. And also, local call charge was subsidized with higher long distance call tariff based revenue.

The basic lacuna with government run telecom was that in spite of being a highly revenue earning and profit making industry, growth of this service sector was given lower priority and the revenue earned was diverted elsewhere; strangling development of the sector.

In opening out the of the industry, the new players could bring down the cost of service because they were not bound with the social commitments in terms of loss making rural service provision, obligatory service preference as well as various obligatory, employment and social compulsions.   As the cost came down, volume picked up and lead the Industries to becoming more aggressive in the pricing decisions. Moreover, India has lost out the opportunity to develop local manufacturing cpability of telecom H/W, S/W and infrastructure. The external vendors exploited the situation by dumping obsolete equipments and technology on one side and pushed high end products and services putting the cart before the horse. The net effect is that the country's overall interest is left out in the middle.

Coming to the National Telecom service and the business part, it is my considered opinion that the telephone tariff should be related to the national growth. It means that there shall be a basic tariff plan for the basic telecom facility, both wired and wireless, across the urban areas and a subsidized tariff plan in the rural area.

It shall be made mandatory for every service provider to provide service in the rural areas also covered in their license.

Sharing of Systems and Networks by different service providers will make the rural business viable.

To enable the industry to sustain Telecom service business and grow, the tariff plan should be supportive for the telecom business in the urban areas as well as in the rural areas  In view of the advance in technology which will defuse discrimination between Fixed N/W and Mobile N/W in the near future, theere shall be a common Call charging policy that can support the business to sustain and grow and also not to have much adverse impact on the users.

Given are my suggestions based on above considerations:

There need be no discrimination in tariff and charging between Fixed line N/w and Mobile N/W as the same phone could be used as fixed or mobile in future.

There can be distinction in charging between post-paid and pre-paid service. However, it is ideal to move towards making entire telecom service as pre-paid.

Example of Charging methods:- 

1. Local calls within the region (Intra-Network) Unit Fee for Unit duration.

e.g; Re.1 for 3 minutes. This includes Answer fee of one unit which cover the cost of call for the first periodic duration.

In the rural areas the charge shall have 50% subsidy, partly covered with incentives from the government out of its telecom related revenue.

2. INTER-NETWORK and long distance calls. Customers shall have freedom and ability to choose and use any service provider’s network. 

Tariff: Per Second etc., billing could be used for these calls. The tariff shall depend on the area to be reached i.e.; regional, national and international destinations. Also the tariff shall be different depending on the type of service, voice, data, multi-media etc.

Same tariff shall be applicable for Fixed N/W as well as Mobile N/W.

3. Charging of SMS: SMS facility shall be provided in both land lines phones as well as in Mobile phones.

SMS Tariff shall be variable depends on the user/destination. Example:- 10 paise per SMS for person to person local SMS.   

Free of charge SMS for utility services like emergency, Personal banking and financial services, medical service and car parking charges etc.,

Different tariff for SMS for business purposes, like SMS to lottery, Media programs, advertisements from and to different business units, where service charge is additional and shared between the Telecom Service Provider and the business unit which recieve the SMS.

The overall Telecom tariff decisions shall have provision for the tariff to grow along with national economic growth and shall reflect as a percentage of per capita income.

Abraham Paul.

Ex: V.P. Technical Sales, SPCNL SEIMENS ICN, / G.M & SMT TBG BPL Mobile India, / TES (I) DOT India