TRAI moots pay per second billing, telecom operators complain

TRAI moots mobile telecom operators go by the second; companies resent it since there’s money in the minute

The Telecom Regulatory Authority of India (TRAI), the country’s telecommunication regulator, is planning to ask mobile telecom operators to bill customers on a per-second basis in which the customers are charged for the actual usage instead of the present system of per-minute billing.

Tata Teleservices, the country’s sixth-ranked telecom service provider, had recently introduced the per-second billing for its GSM customers, and this helped the company get 3.4 million subscribers – its highest-ever – in August 2009.

The hugely successful ‘pay-per-second’ tariff model of Tata Docomo and a few other new entrants in the GSM market will certainly put pressure on the existing operators to follow suit.

Most providers – who know only too well that there is money in the minute – charge their customers for at least one minute even if they use the service for less than a minute. These telecom providers also know that switching over to a billing model based on the second would certainly eat into their revenues.

Media reports quoted J S Sarma, chairman of the Telecom Regulatory Authority of India, as asking all telecom operators to “consider the per-second pulse as a mandatory option along with their other tariff plans.”

Sarma said this on the sidelines of the International Telecommunication Union (ITU) World Summit held in Geneva.

According to a report in The Economic Times, J S Sarma did not, however, spell out a time-frame for executing the plan for the per-second billing, but the regulator would come out soon with a consultation paper on the matter and also invite suggestions on the per-second billing model.

A research conducted by HSBC in August 2009 showed that per-second billing is the “most disruptive” scheme, which, if adopted by all telecom operators, could lead to the telecom sector’s revenues dropping by as much as 10%-15%.

Meanwhile, Sachin Pilot, Union Minister of State for Communications and IT, said in New Delhi that the Central Government would take a “considerate view” of the TRAI’s proposal on the new billing system. As regards telecommunications, India is a large market having plenty of competition and everything must be done to make sure that the customer gets “the best possible service at the best possible price,” Pilot added.

Reacting to the TRAI’s proposal, T V Ramachandran, secretary-general of the Cellular Operators Association of India (COAI), said in a statement that since there is “more than enough” competition in the mobile telecom market and also because mobile tariffs in India are now among the lowest in the world, there is “no compelling reason to intervene with competitive forces.”

Manoj Kohli, CEO and Joint MD of Bharti Airtel, said his company is waiting for the TRAI to start consultations on the issue.

According to Samaresh Parida, director (strategy) of Vodafone Essar, the consumer today has a lot of choices and stressed that Vodafone Essar “would be happy” to take part in any consultative process with the TRAI aimed at the long-term interests of the customers.