It was expected, but never ever did we thought that it would come about this fast. The whole thing was started by the TATAs as they have always done, flagging of new revolutionary ideas for the Indian Economy through the history, and then adopted by a new comer from foreign lands called MTS. They called it ‘Pay Per Second’. Yes you got it right, after all now its literally ‘Paisa’ bolta hai.
Earlier this week WATBlog had covered the announcements of Airtel, Idea and Vodafone joining the pay per second bandwagon. With Reliance, Aircel and Loop announcing their per second billing plans, and then BSNL’s announcement of introducing per second billing for its post paid subscribers by this December, I guess Paisa per Second happens to be the ‘in thing’ in the telecom industry these days.
Reliance which changed the whole equations about a month ago by introducing its ‘50p for anything you do‘ plan, also felt the heat and has now adopted a new strategy by rolling out 3 plans for different target groups (based on frequency of usage);
- Short duration callers – 1p per second (pulse-1s)
- Standard duration callers – 50p per minute (pulse-60s)
- Long duration callers – A Rupee for 3 minutes (pulse-180s)
It does covers up almost everyone of us, and in a very convincing manner too. Let me illustrate:
If I am a long duration caller with my average calls lasting atleast 15-16 minutes. I won’t mind paying 1 Re for some call which don’t even last for 30 seconds. I have already saved so much. Also, after doing some complex calculation on my scientific calculator (trust me lots of functions involved), it turned out a standard duration caller saves about 18-20% by going for the 2nd plan rather than pay per second.
Meanwhile, The erstwhile BPL, relaunched this March as LOOP, operating in Mumbai Circle has introduced pay per second as well. The interested consumer should do a one time top up of Rs. 48, which would change the customer plan making them ineligible to avail previous privileges if any, but changing all their call rates to per second basis.
Vodafone also had a pay per second launch across nearly all circles where its operating but with different recharge amounts, to check the amount you need to pay in your circle check out this assimilation of data.
Last time, I cited, the incumbents at present are sitting comfortable and would not come down soon, now with every operator in country opting per second rule, surely, the guys at TRAI have shown us the power of bureaucracy in Indian Context. I wonder, now with everybody offering the same rate, what’s there for one company to attract consumers to join their network, I mean technically, what is it that the others can’t offer? Also, What about the new players planning to enter? How would the current scene impact them? Keep thinking and do put up your comments right below. Stay tuned for more on WATBlog.
Hi Yash. You are bang on target. However you are missing one point that is that financial viability of all such plans without the necessary changes in regulatory environment such as License Fees (payable as % of AGR) and MTC (fixed Rs. 0.20 paisa per minute for local and Rs. 0.30 paisa for national calls.
The way per second billing is hyped without necessary environmental changes, all the operators will bleed and sooner or later they will withdraw the plans. Same thing happen two year back when Tata launched the per second billing concept and later within 6 months of operation, withdraw the offering
@Yogesh Thanks for reading and putting up your comment. I am myself not a fan of per second billing at all. neither do I plan to switch. In one of my earlier article(http://www.watblog.com/2009/10/13/tussle-of-telecom-tariffs-to-tempt-the-target-traffic-the-watview/) I have actually put up some theory to back up my whole logic. I echo your opinion, per second billing is a huge mistake and operators face huge losses.
BTW thanks for the update about Tata.
Well, the game has started and it will need deep pockets to survive this game…
The new operators – had “no choice” but to drop prices since they have invested in infra and capacity is a perishable commodity. So, from their stand point they had to do it – no other way…
Now, the incumbants – most of them having been in business for some years now – have taken a call to drop their EBITDA and straightaway matched the new operator’s offers…
Some new operators pitch network quality and general QoS / Coverage as differentiators – but that wont hold on for too long…
My personal take:
With this great levelling of the Telco market – It is now time that Telcos “seriously” look at VAS (or call it some different word) – and re-look rev share business models…
I think the time is coming…