The Telegraph
Since 1st March, 1999
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Rate war spells death of SMS
- Calls cheaper than messages in new tariff packages

New Delhi, Feb. 8: It’s better to talk than SMS: you always knew that. Now, cellular service providers have created tariff packages that could actually spell the death of an STF — a short-term fad.

Here’s why: cellular operators have been locked in a bruising rate war with limited mobility service providers. The upshot of this is that it has now become cheaper for a cellphone user to make a one-minute call under most tariff packages than to zap an SMS message.

At present, cellular operators charge Rs 2 per SMS for a pre-paid connection and Rs 1.50 per message on most post-paid connections (both outgoing messages only).

The three major cellular operators — AirTel, Hutch and Idea Cellular — have slashed call rates to such levels that it is possible to make three calls of 60 seconds each for the cost of one SMS of 160 characters. One character could be a letter or a space between words or a symbol or a smiley.

In the case of heavy users (those who opt for a tariff package of Rs 1,699 per month), the outgoing call is free.

The new rate structure has the potential of throttling the use of SMS — at least by business executives and other commercial users.

SMS had become an exciting feature on cellphones when it was introduced about two years ago. It was exciting, very personal, a silent mode of communication and had no limitations on delivery — which meant the message would go through even if the cellphone was off.

It became so popular among executives, housewives, students and lovers that 18 lakh SMS were zapped every day between the three principal operators — AirTel, Hutch and Idea.

The SMS had become the most favoured means of communication between trend-conscious students, busy executives, bored housewives and clandestine lovers.

The segment that had got most hooked on to SMS is a segment where the ‘JLT’ behaviour is common. JLT stands for Just Like That. In marketing parlance, this is a category that does most things without a specific reason.

But that could now change as cellular operators’ tariff packages sport the “speak more and pay less” rubric even as they force subscribers to pay more for value-added services.

The SMS --- which had caught the imagination of the youth and the old --- will now become a premium service.

Industry sources said the cellular companies had raked in the moolah through group messaging services. Voice mail retrieval rates are charged at a rate of Rs 2 per minute for post-paid subscribers and Rs 3 per minute for pre-paid customers. News, sports, stock price, and astrology message retrievals come at a cost of Rs 1.50 per message.

“The world-wide trend is to pay more for value-added services. In the Middle East, Mediterranean, Latin America and the Indian subcontinent, there is a tendency to communicate with a person rather than a machine. As a result, the telecom companies have started to focus more on voice traffic,” said a senior executive in AirTel.

But for the low-end users who opt for the cheaper tariff packages, it will still make a lot of sense to send an SMS rather than call. That’s because the outgoing calls are charged at Rs 2.40 per minute (Rs 1.99 for the Rs 349-tariff package) against the SMS cost of Rs 1.50.

Youngsters and lovers, however, believe it is still too early to write the obituary for the SMS. “If you are setting up a discreet tryst with your girlfriend, it still remains the best option --- especially when you are not quite sure who might be around at that moment,” said an avid SMS-er.

While SMS is under threat, the hot new messaging service that is emerging is MMS or multimedia messaging service. This allows a cellphone user to zap a picture along with a message. At present, BPL is the only cellular operator that offers the service. If it catches on, the other cellular players could provide this value-added service. But at Rs 5 per MMS, its appeal could remain limited.

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