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Two New Mobile Tariff Models In India: Dynamic Pricing & Monthly Fixed Price With Fair Use

If you thought, like we did, that the tariff war in India couldn’t get any worse (or better, if you’re a consumer), you’d be wrong. Far from prices bottoming out, two new types of offerings have been announced recently:

Uninor’s Dynamic Pricing, Based On Tower Traffic

Uninor last week launched dynamic pricing, offering customers discounts on calls based on where they are making the call from. Discounts can change from 5% to 60% by simply crossing a street, and call pricing will vary between Rs. 0.20 and Rs. 0.50 paisa. Branded as ‘24X7 Badalta Discount Plan (DP)’, it will offer customers changing discounts on their calls based on traffic on the network. The discounts will change with location and with time, each cellphone tower will broadcast a different discount, and at the same location, discount will change on an hourly basis. The service was launched in three circles – Andhra Pradesh, Tamil Nadu and Karnataka, and will subsequently be extended to other networks.

It works like this: the discount available at a particular location will be visible at all times on the customers handset screens of handsets, which will be the applicable discount for the call, even if the location changes after making the call. When the call ends, a flash will appear on the phone screen indicating the actual discounted cost of the call. Discounts are calculated by a ‘Discount Engine’ that monitors traffic at every tower in the network.

Should we expect consumers to run around from location to location just to figure out where they can save a few bucks, or wait for pricing to change before making a call? I think not. Tariff’s are already low, and added uncertainty of this dynamic tariff system will probably not go down with customers.

RCOM’s Monthly Fixed Price

In comparison, the Simply Reliance plan tries to become even simpler. Reliance Communications has announced an unconditional monthly recharge plan to its CDMA customers, which offers free ‘on-net’ calls to any local Reliance phone in India (GSM, CDMA or Fixed Line). Two plans are available:

— Simply Unlimited CDMA Local Pack: unlimited local calling at a monthly recharge of Rs. 299 on any local Reliance phone (Reliance GSM, CDMA or Fixed Line) as well as “Virtually” Unlimited free local calls to any other network. All National Long Distance within Reliance network and National Long Distance to all other networks will be charged at 50 paisa/min

— Simply Unlimited CDMA National Pack: unlimited calling across the country for a monthly recharge of Rs. 599 only. This Pack offers unlimited free calls to any Reliance phone in India (Reliance GSM, CDMA or Fixed Line) whether Local or National. The Pack also offers Virtually Unlimited local or national long distance free calls to other Networks in India.

The fine print is an explanation for ‘Virtually Unlimited’, which in our opinion is a misleading phrase. Something is either unlimited, or it isn’t. The ‘Fair Usage’ clause affirms that: Both the Unlimited Packs are subject to Fair Usage condition of 30 mins/day (900 mins/month) applies to Offnet calls. Beyond 30 mins/day, these calls will be charged at 50 paisa / min.

So what other innovation in tariff plans should we expect to see next? Tata Docomo began it all with their pay-per-second model.

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