For postpaid tariffs, the billing cycle works on a monthly basis, irrespective of the number of days in a month.
The Telecom Regulatory Authority of India (Trai) will soon decide whether mobile operators should be asked to offer prepaid tariff packs with ‘monthly’ validity wherein the tariff becomes due for renewal only on the same date of each month, similar to the postpaid tariff cycle.
Currently, most of the prepaid tariff packs come with a predefined validity period of 28/56/84 days, but the regulator has received several references regarding the 28-day validity pack, which is touted as a monthly pack. Customers have highlighted that with 28-day validity pack, which is the most prominent tariff plan, they have to do 13 recharges in a year. If the recharge can be done on a monthly basis, only 12 recharges have to be made in a year.
For postpaid tariffs, the billing cycle works on a monthly basis, irrespective of the number of days in a month. When Trai asked the operators about the feasibility of offering a monthly validity prepaid pack, the telcos expressed their inability to do so. They pointed out that in prepaid services, there has to be clarity and objectivity in the duration for which the services are to be given and with ‘month’ having variable number of days, it should not be the basis of charges of prepaid services.
Telcos also highlighted that unlike postpaid services, where a concept of fixed billing cycle on a monthly basis is followed, prepaid services resume from the date of recharge and follow the validity period of tariff expressed in terms of number of days rather than a fixed monthly billing period. Even in case a 30-day tariff offering is mandated, customers will have to recharge more than once in months having 31 days.
But in an international review of prepaid tariffs, Trai found out that one operator in the UK provides ‘pay as you go’ tariffs for duration of a month and the tariffs renew automatically on the same day of each month, which in practice is similar to postpaid services. Verizon USA also follows a monthly system for charging its prepaid services.
“Thus, considering the international practices and considering the fact that tariffs for postpaid services are also fixed on a monthly basis despite the changing number of days in different months, some of the concerns of the telecom service providers may be misplaced,” Trai said in a consultation paper on the issue.
All the stakeholders, including telcos, can submit their comments on the issue by June 11.