Tariff Wars Going to Intensify!

12 11 2009

If latest report by HinduBusinessline becomes reality, then location based mobile tariffs (LBT) soon will be available to Indian pre-paid mobile subscribers. The tariffing is called as ‘Dynamic Discount Tariffs’, which will allow operators to offer discounts on already cheap call rates, based on subscriber’s location and time.

Telcordia, world’s largest telecom software company behind the innovation will offer this innovative tariff solution to Indian Telecom Operators very soon. The idea behind the LBT is simple to understand. If you are making calls in/out on your prepaid mobile connection during busy hour from a busy business hotspot, you will end up paying more for your calls. What you could do is to call Operator’s Interactive Voice Services or subscribe to LBT SMS service, to find nearby low congested area, move there and make your calls, which are relatively going to cheaper. This will certainly help operators to better utilize their network resources. This solution is win-win deal, as subscribers get discounted tariffs too while levering traffic load on network.

The LBT has already been implemented in few other markets such as Africa, where number of mobile operators such as MTN, Vodafone are using Telcordia’s tariff innovation solutions. The LBT is best way to offer differentiating services (Read LBS in India for more) in overly crowded fragmented Indian market, which will also allow operators to cater needs of consumers by not only providing cheaper calls rates but offering better quality of services too. Till date, the market has been innovating on tariffs by flat reduction of calls rates, but besides that there is good scope to offer differentiating quality services.

But real question lies, how successful will these type of services? What type of discount operators are going to offer, as call rates have touched rock-bottom? Will subscribers travel to nearby locality to make/receive calls, just to get discounted tariffs on call rates (Call rates are already affordable to many of us now)? But certainly, brining innovation by looking beyond flat reduction of call rates is need of time in Indian telecom sector. Certainly cost proposition is going to be key aspect of such innovative services.

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