Reliance Communications offers 1-paisa-per-SMS plan

New Delhi: Reliance Communications, led by Anil Ambani, has announced that it will charge its customers only 1 paisa per SMS.

In a statement, Reliance Communications said that it will offer SMS at 1 paisa each or unlimited SMS at 1 rupee a day.

The new SMS tariffs, according to the company, are add-on plans and will be applicable to all Reliance-mobile customers – both for the GSM and CDMA network as well for pre-paid and post-paid customers.

Irrespective of the current tariff plan, the customers of the Reliance network can avail of the 1paisa-per-SMS plan by subscribing to a standard tariff voucher of Rs 11 a month.

The facility of unlimited SMS plan can be availed on a daily deduction of 1 rupee a day from the customer’s pre-paid balance.

Newspaper reports had revealed recently that while it cost mobile-service providers less that 1paisa to send one SMS, the companies have been charging from 50 paise to 1 rupee per SMS from their customers.

The newspaper reports had prompted several representations to the Telecom Regulatory Authority of India (TRAI), the country’s telecom regulator, by consumer groups as well as members of Parliament seeking TRAI’s urgent intervention to reduce SMS tariffs.

So, since the cost of sending one SMS is only a fraction of a paisa for the mobile-service provider, the 1-paisa-per-SMS plan will benefit both the telecom company as well as the customers.

According to statistics available with the Telecom Regulatory Authority of India, an average mobile-phone customer sends 25 SMS each month – which at present costs about Rs 25 a month. As per the new tariff plan, the customer will have to pay only 25 paise a month for 25 SMS, which means a reduction in cost of as much as by of 99%.

Mahesh Prasad, president of Reliance Communications, told reporters that the “competitive step” that Reliance has taken may prompt the Telecom Regulatory Authority of India to reconsider its intention to intervene in the tariffs on SMS.

The lower costs of the SMS would be especially appreciated by the youth as well as the office-goers, who constitute the majority of SMS users.

This move by Reliance Communications would, in turn, is bound to put pressure on other telecom operators such as MTNL/BSNL, Idea, Tata Teleservices, Bharti Airtel, Vodafone, and Aircel, to come out soon with similar offers.

It is to be noted that the lowering of tariffs drastically by Reliance fly in the face of claims by both the telecom operators and the government that the telecom sector in India is offering the lowest tariffs in the world because, in October 2009 alone, both the pay-per-second voice-call plan and the 1-paisa-per-SMS plan demonstrated that there is scope for further cuts in tariffs.

Besides, the voluntary lowering of tariffs by the telecom companies amply proves that the Telecom Regulatory Authority of India is capable of influencing the mobile-phone tariffs by just taking a consumer-oriented stand.