Tata Tele takes bill off the pulse

Co To Charge For Calls Instead Of Time On Phone  TATA Teleservices' audacious new tariff plan could set off a bruising price war in what is already a cut-throat market, analysts said, and wary rivals are waiting to see if the concept is actually the "game changer" that it has been made out to be.      India's sixth-largest mobile phone company said that billing customers for every call they make instead of the amount of time they speak holds the potential to "completely redefine the Indian telecom pricing paradigm".      "There is no catch or any hidden charges. We have never gone back on a promise and our business model involves earning the respect and trust of our customers. That is how the Tatas work," managing director Anil Sardana said.      Users with prepaid plans on its CDMA service will have to pay only one rupee for every local call and Rs 3 for STD calls regardless of the duration of the conversation. About 92% of Tata Tele's 38 million users of its CDMA service are on prepaid plans.Existing prepaid users can move to the new scheme by buying a one-time recharge voucher of Rs 96. Users who opt for the new tariff plan will be charged a flat rental of Re 1 per day. New level of price competition  TATA Tele also said it will soon launch a similar offering for its postpaid customers.      BK Syngal, a former chairman of VSNL and senior principal at Dua Consulting said the move could take price competition to a level unseen hitherto.     "Indian customers already pay the lowest tariffs in the world. It is good from the consumer's perspective, but it has the potential to choke networks and impact the quality of services. If other operators follow suit, it will be at the peril of their networks," he said.      Bharti Airtel is India's leading mobile operator, with about 106 million of the total 441 million wireless subscribers in the country. Tata Tele is the sixth biggest behind Bharti, Reliance Communication, Vodafone Essar, BSNL and Idea. Mr Syngal added that the new scheme could also be an indicator that the Tatas' CDMA networks are under- utilised.      But Mr Sardana promised that the Tata Teleservices network, ranked as the least congested in India, will "never drop calls". He also argued that internal studies showed that the average duration of a call was only around two minutes and the new pricing model made business sense. A company executive explained that Tata Tele's calculations are based on the assumption that even if all its 38 million CDMA customers shift to this plan, it would still be viable from a business perspective.      "Since a certain percentage of the calls are less than a minute, we make some savings there. Besides, we are confident that after the initial spurt in traffic, it will taper off," the executive said. Rival mobile phone firms say their strategy will depend on how consumers respond to the Tata Tele offer. "It remains to be seen if they are big enough to move the market. They introduced per-second billing for GSM and it failed to evoke a response from the large operators," said an executive with a leading GSM operator.      Tata Tele has about 5 million users on the Global System for Mobile technology standard that is dominant in India. It launched GSM services in six circles about two months ago under the Tata DoCoMo brand. The mobile services of Airtel, Vodafone and Idea are on the GSM platform while Reliance, Tata Tele and BSNL operate both GSM and CDMA-based services.