How prepaid mobile subscribers are being looted

Arbitrary hikes in data and call charges for prepaid subscribers are frequent and not limited to just one mobile operator. In addition, Vodafone and Idea have reduced 3G prepaid data pack validity to a non-standard 28-days, thus forcing the user to recharge 13 times in a year instead of 12

Subscribers of Bharti Airtel have right to be furious over the mobile operator’s decision to charge extra for subscribers using voice over internet protocol (VoIP) apps, like Skype, Viber, Facebook Messenger and Google Hangouts. However, Airtel is not the only one who is charging more to its own subscribers. Several mobile operators like Vodafone and Idea Cellular are discriminating between their own post-paid and prepaid subscribers by enforcing non-standard validity period for internet packs. This follows an arbitrary hike in mobile data tariffs for 3G packs irrespective of whether the subscriber really gets the specified, minimum speed for internet or no. However, more about it later.

The telecom industry follows a monthly billing cycle for all post-paid subscribers. However, when it comes to prepaid subscribers, all telcos want to simply loot them. While a post-paid subscriber pays for 30 days of usage, prepaid customers are forced to use a validity of 28 days for internet packs. Remember, in India, over 90% of the subscribers are in the prepaid category. Therefore, you can imagine the margins earned by telcos from this clever usage of validity reduction.

Both Vodafone and Idea use 28-day validity for all their prepaid mobile internet packs. So how much more it costs to the subscribers in terms of usage? When you use a validity of 30 days over a year, you may lose just five days (used for 30*12=360) in a year.

However, when you are forced to use 28 days validity, you end up losing almost a month (used for 28*12=336 days). This means instead of recharging for 12 times, prepaid subscribers are forced to recharge 13 times in a year, giving an extra income to service providers. This is nothing but daylight robbery of prepaid subscribers, which the regulator Telecom Regulatory Authority of India (TRAI) is supposed to stop.

According to TRAI norms, telecom operators are mandated to conduct a self-check to ensure that the tariff plan(s) is/are consistent with the regulatory principles in all respects which inter-alia include interconnection usage charges (IUC) compliance, non-discrimination and non-predation. However, the act of Vodafone and Idea is in contrast with this direction from TRAI. Both telcos are openly discriminating between post-paid and prepaid subscribers by offering them different validity period for the same service.

As I wrote in 2013, arbitrary hikes in data and call charges are frequent and not limited to just one mobile operator. How does TRAI allow such practices? Why no action is initiated against these telecom companies? (Read: How Idea Cellular arbitrarily increased data charges

In June 2013, all the three telecom services providers—Bharti Airtel, Vodafone India and Idea Cellular—once again showed their camaraderie by reducing data tariff on 2G by as much as 90%. What was interesting in the telcos decision to slash rates for 2G data, this was applicable in almost all the circles where Airtel, Vodafone and Idea did not have a 3G license in their individual capacity.

All the three partners have been increasing tariff for 3G data packs as well. Earlier, the 3G data pack for prepaid subscriber used to cost Rs98 (1GB) for a validity of 30 days. It was increased to Rs125, then to Rs154 and suddenly to Rs249. Both Idea and Vodafone charge Rs245 and Rs251, respectively for 1GB prepaid internet 3G pack with a validity of 28 days. Airtel charges Rs249 for the same pack with a validity of 30 days. However, none of them can assure the subscriber (both prepaid and post-paid) a minimum download speed across locations. Ask any mobile internet user and she will tell you about the miniscule internet speed she gets despite paying higher price for a 3G data pack.

According to TRAI, the minimum download speed varies amongst the telecom services providers (TSPs) even for the same technology and the variation is also quite large. for eg:- in 2G technology, the speed varies from 21.42 kbps to 97.06 kbps between the operators.

“Moreover," TRAI says, "the telecom consumers availing wireless data services are not aware of the minimum download speed being offered to them by the TSPs. Generally, the tariff plans offered by the TSPs are based on the volume of data usage for various technologies, without any clarity about the speed being offered to consumers. Also, there is no commitment of minimum download speed while offering a tariff plan."

Telecom operators had reported to TRAI that the minimum download speed delivered on their highest speed of 3G service is in the range of 399 kbps (less than minimum broadband speed of 512 kbps) to 2.48 mbps.

On 24 July 2014, TRAI came out with a regulation to amend the Standards of Quality of Service for Wireless Data Services Regulations, 2012 (26 of 2012). It mandates service providers to indicate the minimum download speed available and the same should be available to subscribers for not less than 80% of the usage time.

However, most of the times, mobile subscribers never get the data speed as promised by their service provider. Subscribers are not even informed about the drop in data speed.

How come mobile operators are allowed to increase tariffs, introduce non-standard validity periods as per their whims and fancies? How come telecom regulator TRAI or the Department of Telecom (DoT) allow such an arbitrary decisions by mobile operators? Will there be any action against such acts or prepaid mobile subscribers should continue to suffer at the hands of the cartel?