Broadbandindia Magazine

The telecom regulator said that operators will have to provide an optional tariff of per second call along with other packages or plans.

“Per second billing will be one of the options that (telecom) service providers have to provide,” Telecom Regulatory Authority of India (TRAI) Chairman, Mr J S Sarma said when asked about the reactions from operators on the suggestions for per second billing.

“Currently we are preparing a consultation paper on this, which will be out in one to one and a half months,” he added. Mr Sarma said the idea behind the move is to bring in a plan for consumers, which offers per second billing.

He said, “Operators can offer it along with other plans. It does not mean we will fix the tariff. When we make recommendation on this issue, we will keep in view the interest of operators as well as consumers.”

Mr Sarma said on the sidelines of International Telecommunication Union conference in Geneva, “We may ask all the operators to consider per second pulse as a mandatory tariff option along with their other tariff plans.” He went on to add, “Even there (in per-second tariff plan), they must ensure to bring out clearly all the riders and caveats.”

DoT at odds with TRAI

Telecom regulator Trai could find the DoT at odds with its proposal to make at least one ‘pay per second’ plan mandatory for every Mobile Operator. “It is unfortunate that this announcement was made in Geneva at a global telecom event. We fear it could impact potential 3G bids.

Bidders cannot ignore the revenue implications of this move and their bids will be adjusted downwards accordingly. This is a local consumer and tariff issue, and should have been done keeping in mind the overall environmental sensitivity,” a senior DoT official said.

While the DoT does not have any statutory powers to engage in tariff or interconnection issues which fall under Trai’s jurisdiction, this can be seen as an standoff as it carries the potential of placing 3G auction revenues at risk, which is a key priority for the UPA government.

India has been gearing up for 3G spectrum auctions for almost a year now. Though scheduled for December 2009, this deadline may slip for many reasons, including clear availability of 3G spectrum as well as a delay in telecom minister A Raja clearing the Information Memorandum – a key document required for potential bidders to begin investment planning.

These auctions are projected to raise up to Rs 28,000 crore for the exchequer. This estimation is based on a Rs 3,500 crore reserve price which is expected to fetch over Rs 7,000 crore for each pan-India 3G slot.

DoT’s concern is that if tariffs take a further dive and profitability margins are hit, then potential bidders will turn ‘conservative’ on their bids. DoT believes that the market is too sophisticated and funding too slim for the operators to gamble with high bids.

“Potential bidders include large, global telecom operators deploying the most sophisticated bidding tools. The timing of the announcement just before the 3G auctions and its positioning as a mandatory option is worrying,” the DoT official added. India has amongst the lowest tariffs in the world with average revenues per user (ARPU) falling below Rs 200 per month.

Bharti feels TRAI should not take a call on mobile cos tariff plans’

The Chairman and Group CEO of Bharti Enterprises, Mr Sunil Bharti Mittal, feels that the telecom regulator should not take a call on the tariff plans of mobile telephony companies. Instead, it should leave the decision to bill customers either on a per second basis or a per minute basis to individual mobile operator, Mr Mittal said.

As is its practice, TRAI first plans to float a consultation paper on the subject in order to take the industry’s view before issuing a directive. In August 2009, a study conducted by HSBC had put potential losses on account of the per-second-billing model at 10-15% of the telecom industry’s revenues.

At present, all operators, except Tata DoCoMo, Shyam Sistema and Aircel (in a few circles), follow a per-minutebilling system, where in the subscriber is charged for at least a minute even if the usage is less than that.