1.BACKGROUND

IN the month of December 2005/January 2006 most of the Mobile Service Providers launched tariff schemes with lifetime validity. These schemes entitled the subscribers to receive incoming calls for an indefinite period (lifetime). Most of the service providers launched these schemes under prepaid platform. Couple of service providers also extended the concept of lifetime validity with postpaid platform. Broad features of the tariff schemes offered by the service providers are listed in Annexure.

2) Data/information specific to the tariff schemes with lifetime validity was sought from the service providers to ascertain the financial viability of these schemes. However, subsequently it was decided to undertake a consultation process for framing the regulatory policy on these schemes. After going through the consultation process, a tariff order was issued outlining the policy on tariff schemes with lifetime validity. It was clarified that any tariff plan having lifetime validity shall continue to be available to the subscriber as long as the service provider is permitted to provide such telecom service under the current license or renewed license. Other salient features of the Tariff Order on lifetime validity schemes are as under: -

1. In the case of plans with lifetime validity or unlimited validity, the service provider shall also inform the subscribers of the month and year of expiry of his current license.
   
   
2. Hike in any item of tariff during the specified validity period prohibited.

3) Certain apprehensions were expressed by some stakeholders regarding the viability of the scheme since the plans contained features that permit subscribers to continue receiving incoming only for as long as a period of six months.

The basis of their apprehension was that in the lifetime plans, the incoming traffic would be predominantly high and thus the business model which is crucially dependent upon the revenue arising out of termination charges may not work given that the termination charges had been specified at Rs 0.30 per minute. Thus, it was felt that the viability of such schemes should be examined based on operators data on traffic/revenue etc.

4) During the consultation process, the service providers suggested that to assess the long-term viability of the tariff schemes at least a period of six months would be required. Therefore, the data was collected from the service providers for the period from Jan-06 to June-06.

5) By and large the required data has been received from the operators. Data analysis has been made based on the information provided by these operators.

SUBSCRIBER ANALYSIS

Number of subscribers in tariff schemes with lifetime validity as on 30th June 2006 are shown in the table given below.