The death of distance

Category: Offers | No Comments | Posted on February 10, 2006

So the mobile tariffs have finally caught up with technology in India. Distance will no longer be a relevant factor in how we communicate in our business and personal lives.

BSNL and MTNL have announced the “OneIndia” plan today, charging maximum tariff of Re 1 for a call to any place in the country, effective from March 1. Local call rates have been reduced to Re 1 for a three minute call.

But this comes with a increase in rental to Rs 299 per month. All existing tariff plans would continue to be in operation including the lower rentals scheme in rural areas and ‘OneIndia’ tariff plan would be optional.

Under the new tariff package for BSNL’s landline users, the local call charges will be Rs 1 for three minutes within BSNL network (earlier Rs 1.20 for three minutes) while calls to other networks both landline and mobile will be Rs 1 per minute within a state (intra-circle). This was earlier Rs 1.20 a minute.

All other calls made from landline or mobile phones anywhere in the country would be charged at the rate of Rs one a minute which was earlier approximately 2.40 a minute, BSNL Chairman A K Sinha told reporters.

One major consequence of this move is that the TRAI will now have to fashion its revenue share based ADC and revised carriage and termination charges to literally fulfil Maran’s dream.

The PSUs are hoping that losses notwithstanding, they could regain the fixed line telephony market that they lost due to competitive tariffs of mobile telephony.

At a glittering laser show to fulfill communication minister Dayanidhi Maran’s wish of “OneIndia” plan, both BSNL and MTNL put up a brave face and said there would be “absolutely” no loss of revenue as traiff was expected to grow by over 30 per cent to compensate any national loss, if any.

This announcement is especially significant, since most Indian landline users are BSNL/MTNL subscribers. From Dwarka to Dimapur and Kashmir to Kanyakumari, India is indeed One.

But Business Standard adds a word of caution citing increased rentals. Users with large volume of local calls and rural subscribers also may not find the scheme attractive.

In case of BSNL, a heavy local call user, who currently pays a rental of Rs 2,450 under the BSNL premium plan, is offered 3500 free local calls per month. Tariff for calls beyond this limit, is 80 paise per call, which is less than the Re 1 offered under OneIndia. If the same user were to migrate to the OneIndia Plan, his phone bill would be 55 per cent higher, as charges would add up to Rs 3799 ( 299 + 3500).

For MTNL users, under Plan 500 (which provides 450 free calls at a rental charge of Rs 500), it does not make sense to move to the new offering.

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