Yet another instance of a revolutionary feature introduced by a market laggard to leap ahead of competition forces TRAI (Telecom and Regulatory Authority of India) to think of mandating the feature across cellular service providers. Tata DoCoMo garnered a big chunk of subscribers by offering the one-second mobile tariff plan. And heavens opened up. Idea, BSNL, MTS followed suit. Bharti Airtel said a no-no. Reliance entered the fresh season of price wars by announcing alternate schemes.
All this leaves TRAI mulling on making the One Second Tariff mandatory. Looking at this from two perspectives
- Welcome Change – The customer was suffering under the 1 min pulse plan where on an average 20-25 seconds of unused airtime was being paid for by the customer for every call. With the 1 second tariff, the customer pays 1 paise per second that translates to a lot of rupees saved for heavy usage customers over a period of time.
- Accelerate Mobile Connectivity in India – A greater section of the society for whom owning a mobile was still a borderline dream will now come under the throes of the mobile revolution.
Service Provider Perspective
- Negatively affects the ARPU (Average Revenue Per User). In a country where the average ARPU is one of the lowest in the world (about $7 per month per user), this will put additional pressure on the players and might even lead a fresh round of consolidation among the players.
- Tougher Entry Barrier – Mandating the one-second tariff also means that TRAI might be erecting an inadvertent barrier to the entry of new players. The need to work with a lower ARPU and garner a huge subscriber base without any real differentiator in offerings is a tough job