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Cellphone operators may curtail toll-free calls

By Katya B Naidu in Mumbai
March 02, 2010 11:47 IST
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Mobile phone companies wish to curtail toll-free calls from customers. According to a proposal being evaluated by the Telecom Regulatory Authority of India (Trai), calls made by customers to the phone company, other than complaints, will have to be charged.

"They have mentioned it to us and we are examining it. We are awaiting some details. Some companies have sent the details, some are yet to furnish some details," J S Sarma, chairperson of Trai, told Business Standard, without giving specifics. However, sources say that top telecom companies are learnt to have given this proposal.

At present, a Trai regulation forbids telecom companies from charging customers for calls made to make a complaint, such as those on inactive services, non-delivery of bills, wrong billing, etc. This proposal intends to still provide these services for free.

But, customer-care numbers, in addition to taking complaints, also offer other information regarding value-added services like download of caller tunes, details of international calling cards, internet connections, GPRS services, news alerts, astro alerts and stock alerts. Sources say the proposal seeks permission to charge such calls. Sources said Trai's initial response accepted this request as valid.

The proposal is backed by industry associations, also asking for a common toll-free number across operators. "The proposal says the toll-free number will be one for all service providers and it has to be taken up by the Department of Telecommunications (DoT)," say a source from an industry body.

This move, industry experts say, comes from the fact that telecom companies are under pressure to cut costs,as margins have taken a hit since August last year. The rate war, started by the launch of Tata DOCOMO with its one paisa per second offer, continues; MTS is half a paisa per second. Analysts expect this downward trend to continue, as two new companies are yet to launch services nationally in this financial year.

Analysts say that in times when margins are eroding, many freebies that customers enjoy might come to an end. "It is not possible to sustain the current tariff levels and companies will look at levying charges. Billing of information services, as such, will not make a big change to telecom companies. In 6-9 months time, they will start looking at many more services to bring under billing purview, like where consumers SMS and get information, etc," says Romal Shetty, head of telecom at KPMG.

Experts say this billing of free services might not take off very soon, as new players are launching, which poses the threat of subscriber migration. But, eventually, many now-free services would come under billing purview.

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Katya B Naidu in Mumbai
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