Vodafone Idea Limited (VIL) and Bharti Airtel have announced the new prepaid tariff plans which become applicable from December 3, and there are significant changes for prepaid mobile users to wrap their calculations around. The biggest, and perhaps the most important change, is that Vodafone Idea and Airtel will now charge for calls made outside the Vodafone Idea network, to the tune of Rs 0.06 per minute, once the bundled calls with your recharge packs are exhausted. This is known as the Interconnect Usage Charge (IUC). What this means is, your new Vodafone Idea or Airtel prepaid recharge will now give you a limit of ‘bundled’ calls that you can make to friends and family who may have a mobile connection from another mobile service provider, such as Reliance Jio or BSNL. These are called off-net calls, basically off the network you are on. Which in this case is Vodafone Idea.
Vodafone Idea is offering what it calls a Fair Usage Policy (FUP) of 1000 minutes onwards on its new prepaid recharge packs, depending on which one you pick. Use up all of these minutes, and you will be charged Rs 0.06 per minute for calls that are to Reliance Jio, Airtel and basically any mobile operator that is not Vodafone Idea. This is a big shift from the company’s original stance in October when Vodafone Idea maintained that users shouldn’t be burdened with having to keep note of which operator they are calling, that all calls will remain free for its users and that IUC is something mobile operators need to work out within themselves. At the time, Reliance Jio had announced that it will charge for calls made outside the Jio network, once the bundled free calls run out, on their tariff packages.
“The announcement by one of the telecom service providers today to charge for calls made to other service providers to cover the termination charge of IUC is not only an action of undue haste but it also does not bring out the fact that interconnect is a settlement between operators and not a consumer pricing matter. In our view, its TRAI’s call for a consultation on IUC keeping in mind the continuing asymmetry in traffic and in line with its earlier stated position on the matter,” Vodafone Idea had said in a statement shared with News18, at the time.
The Interconnect Usage Charge or IUC which is the basis for this move, is a tariff paid by one mobile telecom operator to another, when the customers of one mobile network make outgoing mobile calls to the another operator’s mobile network, that is to their friends and family using the other mobile network. For example, if person A is to make a call from a Reliance Jio connection to an Airtel mobile connection used by his friend, Reliance Jio will have to pay this charge to Airtel on a per minute basis because the call landed on the Airtel network. These calls between two different networks are known as mobile off-net calls, as defined by the Telecom Regulatory Authority of India (TRAI). The IUC charges are fixed by the TRAI at 6 paise per minute.
Jio had then pointed to the year 2017 when other mobile operators reduced voice tariffs for their 4G customers but continued to charge exorbitant tariffs to their 35 – 40 crore 2G customers, and in fact increased the tariffs for voice calls to around Rs. 1.50/ minute. “The price differential of free voice on Jio network and exorbitantly high tariffs on 2G networks causes the 35 – 40 crore 2G customers of Airtel and Vodafone-Idea to give missed calls to Jio customers. Jio network receives 25 to 30 crore missed calls on a daily basis,” Jio had said in a statement. The 25 to 30 crore missed calls per day should have resulted in 65 to 75 crore minutes of incoming traffic for Jio but instead, the call backs made by the Jio customers results in 65 to 75 crore minutes of outgoing traffic.
While Airtel wasn’t vocal in its criticism of the Reliance Jio move to charge the Rs 0.06 per minute tariff from customers making calls outside the Jio network, they also have had to rejig their tariff plans. The new Airtel prepaid recharge packs will charge Rs 0.06 for off-net calls. There will be an FUP of 1000 minutes of free off-net usage bundled with all 28 day packs, while there will be 3000 minutes FUP with all 84 day packs. The long term packs that have a 365-days validity get 12000 minutes of FUP for calls made outside the Airtel network.
While Jio has not yet announced its new prepaid tariffs, the company has said in a statement that their users will get up to 300% more benefits with the new subscription packages. The new tariffs are expected to become applicable from December 6, which means we should have the final line-up before that.
It is important to note that Bharti Airtel and Vodafone Idea have not made any changes to the postpaid plans just yet. One of the reasons for that is postpaid users already have a higher average revenue per user (ARPU) owing to the more expensive rentals they pay every month for the voice and data bundle, and also account for a healthy revenue stream for the mobile companies. Jio is expected to keep its tariffs lower than what Airtel and Vodafone Idea have announced. There may also be separate, and possibly more exciting, tariff plans for the JioPhone users.