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Thursday, June 3, 1999

Bonanza for cell phone companies in offing

Dev Chatterjee  
MUMBAI, JUNE 2: Cell phone companies are in for a bonanza as from August 1 it would be MTNL consumers who would be paying for making a call to a cellular phone. As per a recommendation of the independent regulator of the telecom industry, Telecom Regulatory Authority India (TRAI), calls received on cell phones will become free while calls made from the MTNL lines will be charged at an average rate of Rs 3 per minute.

This was one of the main demands of the cellular phone operators who wanted their sales graph to go up as more people will opt for a cell phone if the incoming calls are made free. With this, telephone customers are gearing up for a major hike in their monthly phone bills as the Mahanagar Telephone Nigam Ltd (MTNL) will charge a hefty rate for calls made to cell phones from their lines from August 1.

At present, cellular phone customers are paying charges to MTNL for receiving calls while calls made from MTNL lines to cell phones are free. This system has been dismantled by the TRAI. Whilethe cell phone companies - BPL Mobile and Max Touch - welcome the move to free receiving calls, it would be the MTNL customer who will have to shell out a hefty sum - equivalent to air time rates presently charged by the cell phone service providers.

This move by TRAI will, however, help the cellular phone customers in Mumbai who are paying the highest cell phone air time charges as compared to their cousins in the rest of the country. The air time rate of Rs 4 per minute in Mumbai is the highest when compared to Rs 3 and even Rs 2 per minute paid by other metro consumers. After including the Rs 600 rental per month, cell phone companies - Max Touch and BPL Mobile are generating the maximum revenue than other cell phone operators.

With over a three lakh-plus consumer base between BPL and Max, it's the consumers who are the losers as the launch of cell phones services by MTNL has been successfully blocked by the cell phone operators. While consumers in Delhi are paying an average rate of Rs 3, Calcutta andChennai cell phone customers are paying only Rs 2.

Though the air time rates have come down from the peak time rate of Rs 16 per minute from a year ago prices, consumer organisations say that there is a scope for more reduction in air time rates. ``At present, due to duopoly of service providers, the consumers in Mumbai are being charged higher rates,'' says a spokesman of Telecom Users Association of India.

Thanks to high tariff, cell phones usage in India is lowest in the world at only 200 minutes per month while the world average is as high as 500-600 minutes per minute. In fact, say cell phone operators, many customers are using their cell phones more as a pager rather than actual usage of cell phones.

In order to increase the telephone usage, both cell phone operators have launched various tariff schemes which are confusing the customers. In order to entice customers, while BPL is offering free air time in two numbers, Max is offering three as research has shown that customers are making calls onlyto two or three numbers. But if one scrutinises the tariff plans, it shows that a customer ends up paying a minimum bill of Rs 1,200 per month.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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