Borrowed from Economic Times:
Ah! well the privileged SMS pricing DOES need s showdown!
SMS charges are likely to come down. Last week telecom regulator Trai summoned all telcos and sought an explanation on why SMS tariffs continue to remain high. Sources in Trai said that if operators failed to offer ‘satisfactory responses’ within the next couple of days, the regulator will step in to specify lower SMS charges. However, an executive with a telco who was in that meeting said Trai had not issued any ultimatum to telecom service providers. “The regulator only wanted to know why SMS rates continued to remain at the same level when local and STD tariffs have gone through several rounds of tariff reductions in the last two years. Some operators are likely to announce a reduction in SMS rates,” the executive added. Trai had decided not to intervene in SMS tariffs in 2006 and had asked operators to reduce the rates in a gradual manner. At the same time Trai said that it will act ‘in case there were competition issues in the retail market and if consumer interest was adversely affected’. Trai sources said that it is being forced to intervene now because both these factors are in play and added that despite several warnings, operators have failed to reduce SMS tariffs.
ET has also learnt that Trai is particularly concerned about premium SMSes, whose tariffs range from Rs 2-10. The regulator has listed out three issues on which it wants immediate action. First, the tariffs for premium SMSes cannot be multiple times higher than normal text messages since the nature of services offered in both cases were the same. Second, while the volume of premium SMSes have witnessed a massive increase in the last two years, telcos have cashed in rather than voluntarily reducing the charges. Third, many customers are not fully aware of premium SMS rates as their tariffs are not ‘widely publicised’. [very True!]
An executive with another telco said that the charges for premium SMSes are high because revenues earned through them are often shared with the content provider, broadcaster and other stakeholders. “We will present our case to the Trai. We will also point out that all operators offer several bundled schemes where SMS rates are very low,” the executive added.
With mobile tariffs on a downward spiral, customers are increasingly making a direct call rather then send a text message. Latest figures released by sector regulator Trai reveal that customer preference for texting in India has hit an all-time low. From close to 8-9% of the operators’ revenues at one point, texting now provides GSM players with 4.3% of their total revenues, while for CDMA operators, it is a mere 1.8%.
According to Trai, an average GSM user sent about 26 SMSes a month in the quarter ended March 2008, compared to 28 SMSes a month in the previous quarter (October-December 2007), 32 a month in the July-Sept quarter, 35 in the April-June quarter, 39 in the Jan-March quarter and 48 in October-December 2006 quarter. Ditto on the CDMA front—the number of outgoing SMSes by customers using this technology platform has fallen to 16 per month after remaining flat at 17 per month for nearly half a year. Prior to that, it was 20 per month in the April-June quarter and 24 in the January-March 2007 quarter.
Beep!Beep! here's d sms!
Ah! well the privileged SMS pricing DOES need s showdown!
SMS charges are likely to come down. Last week telecom regulator Trai summoned all telcos and sought an explanation on why SMS tariffs continue to remain high. Sources in Trai said that if operators failed to offer ‘satisfactory responses’ within the next couple of days, the regulator will step in to specify lower SMS charges. However, an executive with a telco who was in that meeting said Trai had not issued any ultimatum to telecom service providers. “The regulator only wanted to know why SMS rates continued to remain at the same level when local and STD tariffs have gone through several rounds of tariff reductions in the last two years. Some operators are likely to announce a reduction in SMS rates,” the executive added. Trai had decided not to intervene in SMS tariffs in 2006 and had asked operators to reduce the rates in a gradual manner. At the same time Trai said that it will act ‘in case there were competition issues in the retail market and if consumer interest was adversely affected’. Trai sources said that it is being forced to intervene now because both these factors are in play and added that despite several warnings, operators have failed to reduce SMS tariffs.
ET has also learnt that Trai is particularly concerned about premium SMSes, whose tariffs range from Rs 2-10. The regulator has listed out three issues on which it wants immediate action. First, the tariffs for premium SMSes cannot be multiple times higher than normal text messages since the nature of services offered in both cases were the same. Second, while the volume of premium SMSes have witnessed a massive increase in the last two years, telcos have cashed in rather than voluntarily reducing the charges. Third, many customers are not fully aware of premium SMS rates as their tariffs are not ‘widely publicised’. [very True!]
An executive with another telco said that the charges for premium SMSes are high because revenues earned through them are often shared with the content provider, broadcaster and other stakeholders. “We will present our case to the Trai. We will also point out that all operators offer several bundled schemes where SMS rates are very low,” the executive added.
With mobile tariffs on a downward spiral, customers are increasingly making a direct call rather then send a text message. Latest figures released by sector regulator Trai reveal that customer preference for texting in India has hit an all-time low. From close to 8-9% of the operators’ revenues at one point, texting now provides GSM players with 4.3% of their total revenues, while for CDMA operators, it is a mere 1.8%.
According to Trai, an average GSM user sent about 26 SMSes a month in the quarter ended March 2008, compared to 28 SMSes a month in the previous quarter (October-December 2007), 32 a month in the July-Sept quarter, 35 in the April-June quarter, 39 in the Jan-March quarter and 48 in October-December 2006 quarter. Ditto on the CDMA front—the number of outgoing SMSes by customers using this technology platform has fallen to 16 per month after remaining flat at 17 per month for nearly half a year. Prior to that, it was 20 per month in the April-June quarter and 24 in the January-March 2007 quarter.
Beep!Beep! here's d sms!