Cell Phone Tariffs: Companies benefiting by confusing Customers?

October 18th, 20109:28 pm @    

Stiff competition between telecom companies has led to tariffs which have decreased rapidly and have never been so low before. As more and more players venture into the telecom sector the competition gets tougher. But the tariff plans which these companies offer are very knotty and hard to comprehend! Multiplicity of offers range from prepaid recharge coupons, buying validity, SMS pack, roaming national/international to varied charges for calling other networks/calling landlines, night calling, value added services, internet usage, fax etc. The following chart has been adopted from a consultation released by Telecom Regulation Authority of India on October 13, 2010. It gives the number of plans offered by telecom companies in different states –

Number of subscription plans across states in India

Number of subscription plans across states in India

In the mad race for retaining old customers and attaining new subscriptions the companies’ come forward with convoluted tariff plans which are even beyond comprehension levels of educated citizens. The fact that an average customer is totally befuddled when he has a host of options to choose from cannot be denied. Unable to decipher the package’s terms and conditions he/she turns to the service provider company for advice which is bound to be biased in most of the cases.Non transparency and complexity in plans is has become a headache. The offer which might seem very feasible in the first instance may have strings attached which can be discovered only after in depth probe!

Telecom Regulatory authority of India has finally stepped in and has released a consultation paper on issues relating to telecom tariffs. The consultation can be viewed by following this link- http://www.trai.gov.in/WriteReadData/trai/upload/ConsultationPapers/216/ConsultationPaperon13Oct.pdf

TRAI seeks response from Customers and telecoms. Further steps would be taken after considering all pros and cons.  The responses can be posted as comments at the website.

For any clarification/information, Sh. Raj Pal, Advisor (ER), TRAI, may be contacted at Tel.No. +91-11-23230752, Fax: +91-11-23236650 or email at raj.pal@nic.in or eco@trai.gov.in.


1. What, according to you, are the challenges which Indian telecom subscribers face while understanding and choosing the tariff offers?

2. What according to you are the required measures to further improve transparency in tariff offers and facilitate subscribers to choose a suitable tariff plan?

3. Do you think mandating “One Standard Plan for All Service Providers” particularly for the prepaid subscribers as suggested by some consumer organizations would be relevant in the present scenario of Indian telecom market?

4. Do you think the existence of large number of tariff plans and offers in the market are beneficial for the subscribers?

5. In your opinion is it necessary to revise or reduce the existing cap of 25 on the number of tariff plans on offer? If so, what would be the appropriate number?

6. Should there any limit be prescribed on the rates for premium rate SMS and calls? If so, what should be the norms for prescribing such limit?

7. If not, what further measures do you suggest to improve transparency in provision of the premium rate services to prevent the instances of subscribers availing such services without understanding financial implications thereof?

8. Do you think there is sufficient justification to allow the service providers to realign the ISD tariff in respect of existing lifetime subscribers in view of the grounds mentioned in their representations?

9. What measures do you think are necessary to improve transparency and to prevent instances of unintended recharges by subscribers in situations of cross restrictions of recharges?

10. Considering the nature and structure of the prevailing tariff offerings in the market and advertisements thereof, do you think there is a need for TRAI to issue fresh regulatory guidelines to prevent misleading tariff advertisements?

11. Do you agree that the instances of ‘misleading’ tariff advertisements listed in this paper adequately capture the actual scenario in the market? If not, provide specific details.

Stakeholders are free to raise any other issue that they feel is relevant to the consultation and give their comments thereon.

(Stakeholders (Customers included) are requested to send their comments preferably in electronic form by 15th November, 2010 and counter comments, if any, by 25th November, 2010.)

Picture Credit- Jupitar Images.

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Nikita is the Co-Founder and Managing Editor of MightyLaws.in. She is a lawyer/author residing in Delhi. She believes that increasing legal awareness is the key to ensure social justice and simplification of law is the means to achieve it. She writes articles on social and political issues for various platforms in English and Hindi.

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