Poor pay 300% more for a mobile call
About 16 million subscribers, who take lifetime validity schemes pay thrice the average cost of a call.
By Harsimran Singh, TNN |
NEW DELHI: The poor in India pay more for a mobile call than their rich counterparts. About 16 million subscribers, who take lifetime validity schemes offered by mobile operators and are able to afford an average usage of just 57 minutes per month (compared to 414 minutes average usage by other subscribers), pay thrice the average cost of a call. The lifetime validity schemes, which began a year ago, were meant for the poor and the elderly, the catch being that users just pay Rs 1,000 as one-time cost and don’t pay for recharge every time.
While the cost of a local or STD call from a mobile phone has reduced to Re 1 per minute in the last 12 months, subscribers of lifetime schemes still pay Rs 3 per STD call and Rs 2 per local call. Lifetime subscribers, who are low-income users generating the average revenue per user (ARPU) of Rs 218 per month, pay thrice per STD call and twice per local compared to other high-income subscribers, who have the ARPU per month of Rs 352. SMSes in lifetime schemes also prevail at the year ago rates.
Operators have generated about Rs 3,200 crore through upfront payment of Rs 1,000 per user from about 32 million subscribers added in last 12 months. Add to that the monthly average ARPU of Rs 218 for 12 months and the figure shoots to Rs 8,371 crore. In some circles, the ARPU went up to Rs 237 as well. Despite garnering huge revenues, operators are still not willing to bring prices to prevailing levels. “There is a trade-off in lifetime schemes as these are low usage customers. It would be highly unviable for operators to bring down prices as we are right now operating on ultra-thin margins in these schemes. You can’t have your cake and eat it too,” said T V Ramachandran, director general, Cellular Operators Association of India. Trai had prohibited operators from hiking tariffs under the schemes but it didn’t say anything about reducing tariffs. Out of 100 minutes of talk time, lifetime subscribers make, on an average, 21 minutes of outgoing calls. About 72% of these subscribers recharge every month. This implies that they are active users.
Most of these subscribers are from labour class like masons, plumbers, drivers, electricians, and mechanics, among others. Other class of lifetime scheme subscribers are the elderly whose outgoing usage is limited. Calls in these schemes are charged at Rs 1.99 per minute for local and Rs 2.99 per minute for STD calls compared to a flat Re 1 in other schemes. “Operators are not NGOs. No business can run properly without profits. Lifetime subscribers can use mobiles for receiving incoming calls and landline for making outgoing calls. Currently no operator has cut tariffs in this scheme but one move may trigger a wave,” said another industry official.
While the cost of a local or STD call from a mobile phone has reduced to Re 1 per minute in the last 12 months, subscribers of lifetime schemes still pay Rs 3 per STD call and Rs 2 per local call. Lifetime subscribers, who are low-income users generating the average revenue per user (ARPU) of Rs 218 per month, pay thrice per STD call and twice per local compared to other high-income subscribers, who have the ARPU per month of Rs 352. SMSes in lifetime schemes also prevail at the year ago rates.
Operators have generated about Rs 3,200 crore through upfront payment of Rs 1,000 per user from about 32 million subscribers added in last 12 months. Add to that the monthly average ARPU of Rs 218 for 12 months and the figure shoots to Rs 8,371 crore. In some circles, the ARPU went up to Rs 237 as well. Despite garnering huge revenues, operators are still not willing to bring prices to prevailing levels. “There is a trade-off in lifetime schemes as these are low usage customers. It would be highly unviable for operators to bring down prices as we are right now operating on ultra-thin margins in these schemes. You can’t have your cake and eat it too,” said T V Ramachandran, director general, Cellular Operators Association of India. Trai had prohibited operators from hiking tariffs under the schemes but it didn’t say anything about reducing tariffs. Out of 100 minutes of talk time, lifetime subscribers make, on an average, 21 minutes of outgoing calls. About 72% of these subscribers recharge every month. This implies that they are active users.
Most of these subscribers are from labour class like masons, plumbers, drivers, electricians, and mechanics, among others. Other class of lifetime scheme subscribers are the elderly whose outgoing usage is limited. Calls in these schemes are charged at Rs 1.99 per minute for local and Rs 2.99 per minute for STD calls compared to a flat Re 1 in other schemes. “Operators are not NGOs. No business can run properly without profits. Lifetime subscribers can use mobiles for receiving incoming calls and landline for making outgoing calls. Currently no operator has cut tariffs in this scheme but one move may trigger a wave,” said another industry official.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
