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2G Mobile Internet Rates Hiked In India; Consumer Consent For Plan Changes?


Mobile companies in India have hiked the 2G data rates by 25-50 per cent and postpaid customers are being told to pay the updated fee for the month of September. Though the news came out last week, customers were not told in advance about the price change and were not given the option to opt-in for the new rates.

Airtel post-paid users in Delhi who had been using Rs 98 fo 2GB plan were shifted to a new plan where they were told to pay higher tariff for half the date. The company is asking users to pay Rs 125 for 1GB and Rs 198 for 2GB in Delhi. According to this PTI report Airtel and Idea customers in Mumbai are being asked to shell out Rs 154 for 1GB data and Vodafone customers are being asked to pay Rs 155 for the same plan. These companies had hiked the rates in Karantaka circle earlier this month and they have been rolling out the plan across India. This is the second hike in 2G Internet rates by these companies in less than a year. The last hike was at the beginning of the year when 2G rates for 1GB pack was raised from Rs 98 to Rs 125. Customers who have signed up for a new mobile connection over the last month were already given the updated rates, but not all existing customers were informed about the change in rates.

Airtel Was Losing Money On 2G Plans

In an earlier interview with Medianama, K Srinivas who is the former President of Bharti Airtel‘s B2C business unit had mentioned the challenges of getting 2G customers to adopt 3G, “I think 2G in India is underpriced. It is significantly below cost for the entire industry. There is tremendous amount of…tell me one country in the world which gives you 1GB for $2? On a feature phone, I want to see the number of guys who cross 2GB on a feature phone. You cannot. As your data consumption keeps going up, you need to make it reach people who are adopters of 2G. If you keep it too high, people will not upgrade. This is a way of getting people on to 2G, and then trying them to upgrade to 3G.” The rate hike is interesting because the 2G spectrum is up for re-auction in January.

Increasing ISD Rates

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Apart from 2G rates, Airtel had also hiked the ISD rates by up to a whooping 80 per cent, while Idea hiked it by 20 per cent. At that point, both the companies had blamed the value of Rupee for the change in rates. Airtel’s over all data revenues grew over 90 per cent year on year to around Rs 850 crore in Q1, and usage grew 117 per cent according to the company.

Lack Of Transparency

The biggest issue is that there is no transparency from telecom providers on how much they charge per GB in each circle. This is further complicated by the numerous special schemes they have rolled out targeting, students and working professionals. Shifting customers on older (cheaper) plans to higher-paying plans will be a challenge for telecom operators.

This is complicated further by a lack of clarity on the options for data plans on Airtel’s website, which has become even more complicated after its shift to the MyPlan service.

Nikhil adds: As far as I’m concerned, they should have discontinued my 2G data connection when they discontinued the previous plan. However, after disconnecting me from the old plan, Airtel added me to a new plan without my explicit consent, and charged me a higher rate for it.

I’ve written to the TRAI complaining about this shift in plans without consumer consent. When plans are discontinued, postpaid customers should be automatically opted out, and given options for subscription to new plans.

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