To cap or not to cap; Trai in contemplation

MUMBAI: Should there be a cap on the permitted number of plans operators offer? What should be the service segments for application of the proposed cap? Is a minimum validity period specified for tariff plans? Should promotional plan offers be made as a standard discount offer? All of these ambiguous issues and more was the agenda at an open house session with Trai representatives at the Ambassador Hotel in Mumbai today.

Trai chairman Pradip Baijal along with other representatives delved into long pending issues and also gave an insight into the proposed plan of action regarding the issue of limiting the number of tariff plans offered by access providers.

The need for limiting the number of plans seems to be the need of the hour as Baijal says, "Companies are creating a significant amount of confusion when advertising their tariffs. There are far too many plans to allow the user to make an informed judgement on the right choice."

Considering the widespread concern in regards to the increasing number of tariff plans, which not only baffle the consumer but also makes it next to impossible for them to render an informed choice. Trai opines that it is most vital to place a cap on the number of plans being offered by service

providers as it is seen as the only way of achieving it.

Hence this brings us to a number of issues:

1. The permitted number of plans should continue that a competitive market warrants, also enabling the consumer in choosing the best option. Since operators have anyway made inroads into the market with such momentum, a cap of five numbers is unlikely to curb competition.

2. Services permitted under licensees are being executed in different modes with mobile services made available in both prepaid as well as the postpaid mode. Hence, for the purpose of tariff plan capping, these services have to be treated as separate segments. Likewise services like ISDN, centrex et al would also fall under a different segment or could be left out of the capping as there are only limited plans offered for these services. Although, emerging services like DSL should be treated as a completely different segment and should be made subject to capping.

3. Constant withdrawal of tariff plans could pose problems for consumers as it would lead to changes in estimated spending. Ensuring a minimum validity period for tariff plans would only take away the uncertainty factor. However, this could also prove to be a pitfall for consumers taking into consideration the continuous falling of telecom tariffs on account of fierce competition. Another view could be that the specification of minimum validity period could curtail the flexibility to the operators in passing benefits of competitive decline in tariffs to the customers.

4. Should business or corporate plans be treated as a separate segment considering the requirements of business customers would be different from general or individual customers. The issue essentially is whether both general and business tariff plans are to be treated as a single segment of

the capping or should an inclusion of another five plans be incorporated for corporate accounts.

5. The current scenario has service providers using different permutations and combinations to generate different value added tariff plans. The point here is if this continues, the purpose of putting a cap will be defeated, hence it is crucial that every tariff plan would clearly identify tariffs for each element including VAS.

6. Should there be standardisation of discounts for promotions plans or will they simply add to the confusion in the market. Multiple sectors and vertically integrated operators could also use this in an unfair, anti-competitive manner. Although, on the other hand promotional offers

are beneficial to the consumer.

Considering the above factors and the pros and cons in limiting the number of tariff plans, Trai on a progressive note is in the process of making a software, which will ensure the consumer knows exactly how much he has to pay for 'X' amount of usage, which will maximise the consumers utilisation and increase value for tariff.

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