The Telegraph
Since 1st March, 1999
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Reliance talk thunder

New Delhi, Nov. 4: Flush with victory after the government cleared the proposal for unification of telecom licences, Reliance Infocomm is preparing to set the cat among the pigeons with the country’s cheapest pre-paid mobile phone card that will cost just Rs 200 and offer the entire amount as talktime to first-time buyers.

Most cellular operators offer first-time buyers talktime on pre-paid cards that works out to about a fourth of the cost of the card, with the rest going towards processing charges.

The pre-paid segment is where all the action is. Cellular operators get 75 per cent of their revenue from the pre-paid card business with only 25 per cent coming from the post-paid segment.

Eighty-five per cent of all new cellular phone subscribers come from the pre-paid segment.

Reliance plans to lace its pre-paid card offer with the cheapest outgoing call rate of Rs 1.50-2.00 per minute — this will apply to calls made to other mobile networks. Calls within the Reliance network will cost 40 paise-Re 1 with a 15-second pulse. Reliance will also offer the cheapest option to go mobile — Rs 1,700 for a pre-paid card with a bundled handset. The scheme will be launched on November 15.

In comparison, a cellular operator like Airtel offers a pre-paid connection with a handset for Rs 2,900. Public sector BSNL and MTNL are also planning to offer handset-bundled packages.

“We are working on different pre-paid schemes that will bring in more subscribers. The tariffs have been discussed and are likely to be announced next Saturday. Our tariffs will be one of the most affordable and easy to understand,” said sources in Reliance Infocomm.

Under the pre-paid scheme, calls from a Reliance phone to a fixed phone could be priced over Rs 2 per minute.

Reliance has already become the largest mobile phone operator with a subscriber base of 5 million. The company is the biggest beneficiary of the unified licence for all telephone services announced last week.

It will offer a competitive price for its SMS at 50 paise per message and is exploring the possibility of including multimedia messaging in the pre-paid card scheme.

Anil Ambani, managing director of Reliance, had announced recently that the company would soon come out with a pre-paid card scheme to build on the huge subscriber base created with its Monsoon Hungama plan.

Cellular phone competitors were not willing to comment on the move by Reliance.

“We will wait for the tariffs to be announced. Our tariffs are competitive and will remain competitive and changes will be effected based on market conditions,” said a senior Hutch executive.

“The pre-paid market is growing at a faster pace. GSM (or cellular) pre-paid subscribers are getting many value-added services and more such services can be accommodated within the existing schemes. A pre-paid customer prefers to move from one operator to another and does not like to be bound by one. We provide that flexibility,” said Manoj Kohli, president, mobility group, Bharti Televentures Ltd.

An industry observer said one important factor fuelling growth in the pre-paid segment is the virtual saturation at the top end of the market.

Moreover, pre-paid schemes offer almost all services available under post-paid plans, at a slightly higher cost.

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