New Delhi: Tata Teleservices Ltd (TTSL) has launched a flat per-call plan for subscribers on its CDMA network in a move that could attract customers in a market that has traditionally grown on the back of aggressive pricing.
Under TTSL’s plan, irrespective of the duration, a call will cost Re1 within the same area or circle and Rs3 within India. SMS, or short messaging services, will be available for Re0.50 per message irrespective of whether it is local or national, a statement from the firm said.
Competitive pricing: TTSL will monitor the usage patterns of its CDMA subscribers under the new tariff plan in order to check abuse. Hemant Mishra / Mint
Tariffs for international long distance, roaming (or moving across circles) and value-added services remain unchanged, Anil Sardana, TTSL managing director, said.
TTSL’s service, branded Tata Indicom, operates on the CDMA technology platform. The bulk of India’s 441 million mobile phone subscribers are on the rival GSM platform. TTSL is a relatively new entrant in the GSM space with its service, branded Tata DoCoMo.
The firm already offers a highly competitive plan for subscribers on its GSM network where they pay 1 paisa for every second they talk. In two months, the firm has already signed up six million subscribers on the GSM network which has rolled out in eight operating areas including the four southern states, Orissa, Madhya Pradesh and Maharashtra.
In India, mobile subscribers pay between 30 paise and Re1 per minute, depending on the tariff plan they have with the various telecom firms. The average call lasts for around two-and-a-half minutes.
“There will be a spurt in usage in the initial stages of the launch but in the long run, this will taper off and come down to rational levels,” said Sardana of his company’s new pricing scheme. “We have done all the calculations and checked the permutations and combinations and we see this beneficial for both the company and the consumer.”
The firm will be carefully monitoring the usage patterns of subscribers on the new tariff plan in order to check for abuse, an official said.
“For instance, two stockbrokers could keep a call running throughout market hours, using it as a hotline. This would not be allowed and therefore we would have to terminate the new plan for them,” he added. It wasn’t immediately clear how the company planned to do this.
People who carry around more than one phone could end up using the Tata Indicom one for longer calls, said Kunal Bajaj, the head of strategy consulting firm BDA Connect (India).
On a 3-minute call, the termination charge (or amount paid to the firm which carries the call to the final recipient) is around 60 paise, so TTSL still makes money, Bajaj added.
And it also adds customers. TTSL is the sixth largest subscriber in the country and ended July with 39.37 million subscribers, according to data from the Telecom Regulatory Authority of India.
Bajaj said it was unlikely other telecom firms would emulate TTSL. “No one has copied its per-second plan (on the GSM network) and I don’t see this being copied either,” he said.
TTSL has also drawn up an additional investment plan of $1 billion (Rs4,870 crore) in order to participate in the auction of 3G (third generation, or data rich) services and Broadband Wireless Access (BWA; used for WiMax services) spectrum and to fund its network expansion.
“We will soon approach our shareholders for raising $1 billion to fund our 2G (second generation; the current network) network expansion plans and some of it will also go to the 3G auction participation,” Sardana said.
This will take TTSL’s total investment over the next few years to $3 billion.