The Telegraph
Since 1st March, 1999
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Cell clan raises din over Hungama

New Delhi, July 4: Mobile, mobile, take a call on who’s the cheapest of ’em all'

It’s fast turning into a raucous fish market. As cellular and WiLL operators slash entry level charges to ridiculously low levels in a desperate scramble to sign on subscribers, customers are having a hard time trying to make sense of the claims and cost calculations.

On Wednesday, Reliance unveiled its Monsoon Hungama package that touts an entry-level charge of just Rs 501; the company claims it has already signed on over 2.5 lakh new subscribers within two days.

The Cassandras are already taking pot shots at Reliance, claiming that trouble will begin when the calls start flowing through a network that will be badly stretched to handle the beep brigade.

However, Reliance’s success in signing on new customers has everyone more than a little worried. Cellular operators are chomping at the bit because of a regulatory trammel that restricts their ability to scale up operations and sign on new customers. Blame it all on the restricted spectrum — the radio frequency bandwidth whose allocation is entirely determined by the government.

Cellular service providers today fired their salvo against the latest Reliance package by claiming that their services would remain cheaper than the limited mobile phone service providers.

According to a senior AirTel executive, “The limited mobile service would be still 25 per cent costlier than the tariff offered by cellular mobile operators. There are other handicaps like limited mobility in the WiLL service and the fact that the handset locks you into a limited mobility service provider. Our handsets give you the freedom to opt for any service provider; theirs do not, which means the handset has no resale value.”

Sources in the cellular industry said, “The company (Reliance) has brought down entry charges on the handset to Rs 501. But it has driven up ‘club charges’ to Rs 200 per month for 36 months, up from Rs 100 per month. The total handset charges that would be collected is thus Rs 200 (for 36 months) plus Rs 501, which works out to Rs 7701.”

This was countered by a Reliance spokesperson, “We never claimed that this is lowest. Our attempt has been successful in bringing down the entry cost for mobility; the new initiative is a step in that direction.”

However, the Reliance spokesperson did not wish to divulge how many base stations the company had installed across the country to field the expected deluge of calls. This is important for good connectivity and the quality of service. While AirTel executives were willing to disclose the number of base stations that they have installed, they blamed the lack of spectrum for bad connectivity and call drops.

Meanwhile, Reliance Infocomm is in a spot of bother because the regulator — Telecom Regulatory Authority of India (Trai) — has questioned the Hungama offer. The telecom regulator has asked the company to explain why it has not taken prior approval for the new tariff package.

Before launching any new tariff package, the telecom operators have to seek approval from Trai. However, the regulator has allowed the operator to go ahead with the Monsoon Hungama offer till it scrutinises their plans.

Reports indicate that other operators are planning to come up with some schemes to entice customers after the tearaway success of the Reliance Hungama offer. For instance, state-owned Bharat Sanchar Nigam is reported to be mulling a scheme to offer a free handset for its limited mobile service.

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