On cards: Transparency in telecom tariffs

Strap: In India, most people buy telecom services without really understanding the tariff or comparing the offers of various service providers for an informed choice. It might soon change

Pushpa Girimaji

I always find it difficult to choose a pre-paid plan for my mobile phone connection because of the confusing and, at times, misleading information provided by service providers in respect of prices and tariff offers. I am told that the telecom regulator is now bringing some changes in the way service providers display the tariff information so that consumers are able to make an informed decision. Is this correct?

The Telecom Regulatory Authority of India (TRAI) has issued a consultation paper on ‘Transparency in Publishing of Tariff Offers’, wherein they have acknowledged the problems being faced by consumers in respect of choosing the right tariff plan and offered various solutions. Some of the solutions include a specific format for display of full tariff on websites, mobile apps, etc., so as to make it easy for consumers to understand and compare the tariffs offered by different service providers.

The TRAI has also proposed cost calculators that will assist consumers in understanding the cost of enrolment and continued subscription of various plans. TRAI had invited the response of all stakeholders to the proposal and that process is on. You can see the TRAI’s consultation paper as well as the response of various stakeholders on its website. One hopes that TRAI will bring in the proposed changes and make it easy for consumers to understand the tariffs and choose what is in their best interest.

Why is the telecom tariff so complicated and so difficult to comprehend? Also, what is a tariff calculator and how exactly will it help?

Consumers have the right to choice, but in order to make an informed choice, they must have the required information and full information in a format that is easily understood. Today, if you look at the tariff plans displayed on the websites of telecom service providers, you will find it extremely difficult to make an informed choice because the information is not consumer-friendly and easy to understand and most importantly, it is not complete. There is no data on the Special Tariff Vouchers (STVs) and Combo Vouchers (CVs).

As the TRAI says in its consultation paper: “The foremost factor that often influences actual tariff to a consumer is the availability of STVs and CVs for the tariff plan opted by a consumer.” And there are more than 500 such STVs and CVs. Thus mere depiction of tariff plans without information on the STVs and CVs would not be adequate.

However, simply giving details of STVs and CVs would not suffice. First and foremost, they must be in a format that makes it easy to understand. And each service provider should have an identical format so that it becomes easier to compare the offers of different service providers. That’s why TRAI has proposed a uniform, new format for publication of tariff.

But that’s not all. About 92-95 per cent of consumers in India buy pre-paid plans and they come from varied educational and economic background. This makes it absolutely imperative that tariff plans be intelligible to even those with elementary education, so that they buy what is in their best interest.

So the TRAI has proposed a cost calculator that helps to understand the actual cost of various plans. Regulators in many countries have introduced such calculators. The Commission for Communications Regulation, Ireland, for example, provides such facility on their website, so that consumers can make their decisions on the basis of clear, unambiguous, impartial information. Ofcom, the UK telecommunications regulator, on the other hand, has a scheme for accrediting agencies that provide price comparison services. The accreditation ensures the integrity of the data flow. Billmonitor, one such agency that not only compares tariffs but analyses consumers’ telecom bills and helps them choose the right plan, says that in the United Kingdom, about 74 per cent of telecom consumers are on wrong mobile contracts!

In India too, most people are buying telecom services with inadequate information and without really understanding the tariff or comparing the offers of various service providers for an informed choice. I really do hope that TRAI will not only usher in more transparency in telecom tariffs, but also follow the Ofcom or Ireland model for tariff calculator. In fact, I would urge all consumers to support the TRAI move towards transparency in publication of tariffs, so that the proposal becomes a reality.