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Bad idea: Airtel will auto-renew data plan for postpaid customers who exceed data limit

AirtelAirtel India has made some big changes in the way you’re charged for using data on its postpaid connections. If you end up consuming the data pack you subscribed to, you’ll be auto-renewed for the same amount automatically, reports The Economic Times citing sources. The company confirmed this news to Medianama.

The company charges Rs 250 for 1GB of 3G data and if that expires, you’ll be billed another Rs 250 for additional 1GB whether you use that much data or not! As of now, you will be charged only for the additional data used, i.e., if you use 5MB after exceeding the data limit you’ll be charged for only that 5Mb of data. This leaves a user with an option to not use mobile data till the next billing cycle.

Why is Airtel doing this?: Airtel says this new approach could help avoid bill shock, but people could end up using up few more MBs accidentally and ending up getting a higher bill than they expected.

The other factor is the rising pressure to increase their data revenues. At the end of FY14, the company had reported that it has 58.08 million mobile Internet connections, of which 10.98 million are 3G connections. In the last quarter of the financial year, data usage per connection grew by 11% to 277 MB, up from 249 MB in the previous quarter and up 48% from 187 MB in the same quarter last year. This led to a higher data ARPU of Rs 79 for the quarter, up 5% from Rs 75 in the previous quarter and up 43% from Rs 55 in the same quarter last year.

Why the new plan is bad

– You could accidentally use a few MB of data and be charged for a whole GB/GBs. If you’re on a 1GB plan and end up using it by the 29th of the month. The data pack will be auto-renewed even though there are only two days left in the month! So you’re left with 2 days to use up that 1GB as balance data is not carried over to the next month. Airtel claims that this will be cheaper than the existing pay-as-you-go rate. Which is true, if you plan to use large amounts of data even after exceeding your data cap.

– The auto-renewing data plan is terrible for the customer as they will have to deal with bill shock all over again; just the problem they were trying to address. Shouldn’t the telco ask for explicit permission from the user before charging them an additional fee for data they may not even use? Wouldn’t you be outraged if Airtel charges you in advance for calls that you may make in the future? This is no different. I hope the telco changes this policy before TRAI has to step in.

What should they have done

– Vodafone has something called booster packs just to avoid such a scenario. Want data for a couple of days? No problem, get a booster pack for 100MB or 300MB. Oh and if you don’t get a booster pack, you can continue using mobile internet at 64Kbps with no extra charges. Why doesn’t Airtel have smaller booster packs?

Update: Airtel has something similar to booster packs called Smartbytes, but if you don’t activate this before your data runs out, you’ll be auto renewed. Also, there is no way to put the genie back in the bottle, so you can’t replace auto-renewal with smartbytes once it’s done.

– They could also consider reducing pay-as-you-go charges so that people don’t have to pay obnoxious amounts if they go over the data limit. The current-pay-as-you-go charges discourages new customers from experimenting with mobile data and forces people to be miserly even with their data packs. Airtel mentions that only 28.3% of its total customer base were active data users during the quarter, as compared to 27.4% in the previous quarter and 23.1% in the corresponding quarter last year. If they reduce these charges, they might be able to increase this number drastically.

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