The Telegraph
Since 1st March, 1999
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Reliance mobility stuns competitors
- Telecom services ‘at postcard price’ go beyond expected limits

Dec 27: Reliance Infocomm set the cat among the pigeons when it unfurled its limited mobility service that it touted as a means of communication which would “cost less than the price of a postcard”.

The ‘value-for-money with frills’ telecom service set cellular and basic operators scrambling to find ways to match the Reliance tariff package that offers STD calls for 40 paise a minute and local calls at 10 paise for every 15-second pulse.

The biggest shocker for the telecom players — basic and cellular — was that Reliance did not find the need to constrain its service within the 25-km radius that everyone thought would circumscribe the range of a limited mobility service.

Instead, it offered a roaming option, text messaging service (which is a broader option than SMS), call conferencing facilities, music downloads and movie download services, besides a few other value-added services free of cost.

The other big surprise was that neither Anil Ambani nor wife Tina turned up for the Reliance group’s biggest product launch this year.

Under the Dhirubhai Ambani Pioneer Offer — which is the showboat plan that Reliance is actively pushing — customers will get a free digital mobile phone. To rope in existing cellular service customers, it is offering exchange of the current handset, a suite of data applications at no extra charge and discount coupons for various products and services from a host of retailers.

Consumers will have to make an upfront payment of Rs 3,000 and pay Rs 600 a month for three years.

Reliance Infocomm will commence demonstrations of the service on January 15.

Bookings will start in February across 673 cities and continue till March. At a later stage, the Reliance service will connect all the 640,000 villages and 2,000-odd towns and cities to each other and to the world in a “seamless manner”.

Reliance has upset the cellular operators by offering a service with facilities that closely match their own. The cellular industry has been battling basic telephony operators like Reliance Infocomm to stop them from offering the limited mobility service. Early this month, the Supreme Court tossed the ball back to the telecom appellate tribunal asking it to decide on the cellular operators’ demand for a level playing field.

The value-added services that Reliance is offering has the cellular industry hopping mad.

“It (Reliance Infocomm) has opened up a regulatory minefield. The regulator will have a lot of explaining to do. The operators are examining the issues and we will explore the legal recourse only after we have consulted our legal counsel,” said T.V. Ramchandran, director-general, Cellular Operators Association of India.

Cellular operators are preparing to bite the bullet and match the low tariffs announced today by Reliance Infocomm. They are still trying to assess the revenue implications if they match the tariffs announced by Reliance, but say they had few options to retain their fickle, price-conscious customers.

“The cellular industry continues to bleed and it will bleed some more. The losses have increased by Rs 800 crore in the past year. Since we will have to bring down costs further to match the new tariffs, the losses will mount further,” said Ramachandran.

Other limited mobility service providers like Bharat Sanchar Nigam Ltd, Mahanagar Telephone Nigam Ltd, Tata Teleservices, Shyam Telecom and Himachal Futuristic Communications Ltd are also planning to take another look at their tariffs.

Reliance Infocomm’s competitors in the limited mobility segment — Bharat Sanchar Nigam and Tata Teleservices — do not provide value-added services and stick to plain voice telephony.

“We hope to get a clearance soon since Relaince has been allowed to offer text messaging. There will be a few more tariff packages from us,” said a Tata Teleservices spokesperson.

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