Per sec billing: Boon for users, bane for firms

The per second billing introduced by telecom companies has come as a boon to millions of mobile users in the country but it is proving to be a bane for cellular service providers as it is affecting their revenues, feel industry experts.

According to Telecom Regulatory Authority of India (TRAI) data, the number of mobile subscribers in India has risen to more than 500 million at the end of November and experts are of the opinion that though the number of mobile users has increased astronomically, the revenues are not in accordance with the number.

"We had to tie up a Kirana shop merchant to offer SIM card on purchase of a five kilo wheat flour packet to achieve the target," Praveen, a salesman of a mobile company said. The cost of the SIM has come down as cheap as Rs 50 with Rs 5 talk time.

Most of the users throw the SIM after they use the talk time, he said. The financial impact of per-second tariff announced by almost all telecom operators last October is expected to have an impact in the financial performance of the companies, despite a continuous growth in the number of subscribers.

"Per-second billing is unsustainable. It affects EBIDTA (earnings before interest depreciation, taxes and ammortization) margins. We will see these tariffs for another year-and-a-half after which consolidation will set in," Aircel COO Gurdeep Singh had said in Mumbai recently.