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Updated: TRAI Takes Up Fair Usage Policy Issue, Premium SMS & Calls; Why Not Service Provisioning?

Update: the last date for submission of comments is now 25th November 2010. Read our comments, submitted to the TRAI, here.

October 15th 2010: In its latest consultation paper, focused on consumer issues related to telecom, the Telecom Regulatory Authority of India has taken on the issue of misleading advertising and unethical billing and confusing tariff and recharge practices in the telecom sector. The consultation paper also covers the the advertisement of “Unlimited” plans, with a “Fair Usage Policy” that later limits usage, or beyond a certain limit, leads to a reduction of speed. If you’re concerned about these issues, do send in your comments on the questions below to eco@trai.gov.in by 15th November, 2010 and counter comments, if any, by 25th November, 2010.

Download: Consultation Paper | Press Release

Some issues we’ve culled out (there are others):
– Fair Usage Policy: wherein, the titles of tariff plans suggest unlimited use, but features put restrictions on the quantum of usage with a Fair Usage Policy: if there’s a daily limit in terms of number of minutes for calls the usage. Thus, a plan advertised, as ‘unlimited free calls’ would mislead if there is daily or total limit on the minutes of usage. “For a common man the term ‘unlimited’ would only mean without any limit whatsoever”. The TRAI also mentions advertising of broadband plans for higher download speeds, by paying monthly fixed charges, wherein if a customer exceeds a particular data download limit, the broadband speed would be restricted as per the original plan.

– Other Advertisement Issues: The rate advertised does not indicate the fact that it is available only for on-net calls, or the need for a special tariff voucher for discounted rates. Advertisement of call rates as Per Second, when the pulse rate is higher than one second; advertising ½ paisa per second’ when the actual rate is 1 paisa per two seconds, or advertising 40 paise per minute when the actual call rate is Rs. 1.20 per 3 minutes. Another example, among many listed: advertising a scheme as ‘Free’ , if there is a cap on the daily usage.

– Premium SMS and Calls: The TRAI has highlighted issues involving television voting shows, helpline and competitions, wherein the user is not aware of the tariff applied, artificially increasing the call duration lengthening by increasing waiting times, usage of high tariff numbers for customer care where the customer has no alternative to reach the service, and the use of high tariff numbers for services such as TV games with unclear call prices and procedures.

Apparently, consumer organizations have mentioned issues of “Pull SMS” and “Pull Calls”, and wherein FM radio stations, TV channels and newspapers make attractive announcements to pull SMS/Calls at high rates. There are instances wherein a consumer is required to send SMS (charged at premium rate) in order to buy a DTH service or to lodge a service complaint in respect of DTH.

– Multiplicity of Tariffs: The TRAI mentions that prepaid customers, have to choose from, on an average 27 tariff plans per circle. In case of Bihar and Mumbai, there are as many as 39 GSM tariff plans. The situation is better in CDMA (12 average, and 18 in MP and Punjab), but postpaid tariffs are much higher in number: 61 postpaid tariff plans on an average, with Mumbai having 95 plans. In CDMA, the highest number of tariff plans is 38 (Punjab) and the average number is 27. Additionally, there are a large number of add-on packs in prepaid, with lots of promotional offers due to increasing competition. The TRAI has asked whether number of plans should be limited to 25 per circle, or mandate “One Plan For All”.

– Cross restrictions on recharge packs: service providers impose restrictions on recharges which are not properly communicated to the subscribers, like:
a) Subscriber in a particular plan cannot have the benefit of reduced tariff offered through a special pack.
b) Subscriber can have the benefit of only one pack at a time.
c) Recharge vouchers applicable to only subscribers enrolled in specific plans.
d) Subscriber having lifetime validity recharges with a voucher which inter alia provides validity.

– Interesting suggestion: setting up accredited websites for an interactive price calculation and comparison sites, similar to what OfCom does in the UK. Some challenges there: service providers may not keep their information updated, the formats of price listing may be different by different operators, and complicated structure due to linked charges. Additionally, choosing the most important parameters while keeping user friendliness is seen as a real challenge when developing the website. India becomes all the more complicated, with multiple circles and service areas, and rates for inter circle tariffs and national roaming. Additionally, there are schemes that are dependent on tariff vouchers, which makes it all the more complicated.

What The TRAI Has Not Addressed: False Billing & Provisioning Of Services Without Consent

The TRAI still hasn’t addressed the issue of false billing and provisioning of services without consent, which accounts for a not-immaterial revenues for Mobile VAS in India, while at the same time cheating customers. The TRAI has issued a direction for this on 3rd May 2005, but that doesnt’ mean that the practice does not exist, and that VAS companies and telecom operators are not aware of it. From what we’ve heard, Telecom Operators issue a list of “Revenue Positive numbers” to VAS companies, essentially prepaid numbers with balance remaining. In some cases, services are marketing to these numbers, and in some, services are provisioned without consent. In our opinion, there need to be punitive measures taken against this practice, but these will be against telecom operators, since VAS companies are not regulated by the TRAI. This will be our suggestion to the last question below.

The Issues For Consultation

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
9. What measures do you think are necessary to improve transparency and to prevent instances of un-intended
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.

You may send in your comments on the questions to TRAI at eco@trai.gov.in by 15th November, 2010.

Note: We’ll publish our comments before sending them, and are open to suggestions. Email nikhil@medianama.com with suggestions for our submission.

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