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Tuesday, 2 September 2008

A Good News: (More talktime on pre-paid top-ups from Sept 15 )

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Over 250 million pre-paid card users need not pay processing fee any more.

Consumers to get 30-40 per cent more talk time on the same recharge coupon.

Any tariff reduction will be available to subscribers automatically.

Lifetime pre-paid card users can migrate to new tariff plans without paying any fee.

Our Bureau

New Delhi, Sept. 1 Starting September 15, pre-paid mobile subscribers in the country will not have to pay any processing fee for the recharge vouchers they buy; they will get talk time worth almost the full value of the coupon.

The Telecom Regulatory Authority of India has directed the operators to stop charging processing fee, which in most cases amounts to 30-40 per cent of the recharge value of the coupon at present.

TRAI has asked operators to charge only an administrative fee which shall not exceed Rs 2 and applicable taxes.

This move will result in huge savings for consumers as they will be able to talk more using a single recharge coupon. For example, Bharti Airtel has a pre-paid voucher for Rs 345, out of which consumers currently get talk time worth only Rs 177 (about 90 minutes). The balance money goes as service tax and processing fee.

Once the new regulation comes into effect Airtel mobile users buying this voucher will get talk time worth Rs 305 (about 150 minutes) after paying Rs 38 as service tax.

While Vodafone Essar charges only a maximum of Rs 10 as processing fee on its voucher cards, the major beneficiary in this case will be those recharging using the e-top up (through SMS) option.

Vodafone Essar’s pre-paid users at present have to pay a processing fee of Rs 130 every time they recharge through SMS for a value of Rs 300. Post September 15, when the TRAI’s regulation comes into effect, subscribers will be able to talk for almost 50 per cent more time compared to the talk time they get now with the same Rs 300 voucher.

Financial impact

The move, however, could have financial implication for the mobile operators. As much as 85 per cent of the 300 million mobile users are on pre-paid connection, accounting for almost 70 per cent of the operators’ revenues.

While the operators may not end up losing much money as there is no reduction in the total value of the recharge coupons, the minutes of usage will go up as a result of TRAI’s decision. Validity of most of the recharge coupons is between 30 and 60 days, which mean that subscribers will have to buy a new coupon anyway within a month or two to keep their connection alive. However, the increase in talk time for each voucher could force the operators to invest more into ramping up their network to meet the new demand.


Explaining the rationale for the decision, TRAI said, “It was brought to the notice of the Authority that service providers are deducting certain fixed amount even for recharges exclusively meant for providing talk time to subscribers who already have validity. Such subscribers had already obtained validity by paying a fixed fee. The Authority felt that levy of a second or subsequent processing fee when the customer buys talk time through exclusive talk time top-ups is unjustified.”

Other measures

The telecom regulator also announced a slew of other consumer-friendly initiatives. It has mandated that consumers of a mobile company should get benefit of any tariff reduction announced by the operator without having to ask for it. This proposal assumes significance in the light of the recent announcements by Vodafone and Idea of making available reduced domestic long distance charges to only those subscribers who requested for it through an SMS.

Consumers using lifetime validity plans will be allowed to migrate to new lifetime plans without having to pay any additional payment. TRAI also said that lifetime subscribers need not recharge more than once in 6 months.

Operators have also been asked to make available key tariff information in vernacular languages at all retail outlets and the franchisees.

Source : Businessline

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