MTNL cuts mobile rates to half-a-paisa per second

The state-run Mahanagar Telecom Nigam Ltd has just intensified the tariff war in mobile telephony.

Close on the heels of cellular operators announcing the launch of one-paisa-per-second billing scheme for all local/STD calls, roaming services and SMS, MTNL has slashed mobile tariffs to half-a-paisa per second on home network.

Calls across rest of India will, however, cost one paisa per second.

Earlier, Tata DoCoMo, Reliance Communications, Bharti Airtel, etc had already launched the one-paisa-per-second call rates.

Telecom operators launching pay-per-second tariff plans is great news for the country's telecom users. But while this promises to bring down your telecom bills by a sizeable margin, you need to look at the fine-print before switching over.

Are pay-per second plans for everyone?

Not really. Most operators have introduced per-second tariffs for only pre-paid subscribers. And, you may have to forgo the freebies that come with other plans.

As Ernst and Young's telecom head, Prashant Singhal, says, "There is an obvious benefit in per-second billing, but the question is how much? We already had plans, such as the 50-paise-per-minute ones, that cost less than 1 paisa per second. These work out cheaper for those who make longer calls."

Since telecom operators will get less money per subscriber under such plans, these are being launched reluctantly and in specific circles. With the number of operators in most telecom circles touching 10, per-second billing has worked wonders for new operators like Tata DoCoMo, who can use the price difference to attract new subscribers.

So, if you are a post-paid subscriber, will it make sense to switch to per-second plans? The answer lies in your usage pattern. While your monthly bill might come down by 15 per cent, you will miss the special promotional services offered by other tariff plans.

Hidden costs in per-second plans

The devil lies in the detail and Agnel D'Souza, a Goa-based civil engineer, understands it well. He was among the early users of Aircel's Hungama Offer that promised him a rock-bottom rate of one-paisa-per-second for both local and STD calls. "My clients are spread across Maharashtra [ Images ] and so it made sense for me to switch to a per-second plan," he says.

For people like D'Souza, per-second plans are not only about saving a couple of hundred rupees on monthly bills but also about paying for what they get. "Most of my STD calls lasted more than 60 seconds and involved detailed checks with contractors in Mumbai," he says. But what D'Souza did not notice was the fine-print. "I came to know that the one-paisa rate was applicable for first 10,000 seconds (a little over 2.5 hours) in case of STD calls. After that, I had to pay two paise per second," he says.

Older players such as Idea and Reliance are also in the race and have introduced tariffs competitive with one-paisa-per-second plans to underline that for those who tend to talk longer per call (such as those conducting businesses over phones), paying one-paisa-per-second could work out to be more costly.

Features they don't tell you

Mumbai-based Aneesh Palekar, who opted for a Tata DoCoMo connection three months ago, has been able to bring down his monthly bill from Rs 1,800 to Rs 1,200 due to the operator's one-paisa-per-call offer and the free local SMSes that he gets under it.

But Palekar is not without his share of grievances. A reduced bill, he feels, cannot compensate for a bad network. He complains, "Getting signals, even in city areas, can be trying." The rush due to these new offers, say experts, has put pressure on networks of new entrants. As a result, networks are clogged and call-drop rates are on the rise.

Some operators are also trying to make up for lower call rates by keeping SMS prices higher. For example, Airtel charges Re 1 for local SMSes and Rs 1.50 for national ones.

With inputs from Business Standard