holes in reliance's phone tariff

["Shiv Kumaar" <i_shiv_kumar@hotmail.com>]

at last some balls from www.techtree.com

Who is Reliance Trying to Fool?

Varun Singh

The Media has been going ga-ga about Reliance Infocomm's new Pioneer Offer.
Everybody has  nothing but good things to say about it, but has anybody
bothered analyzing the offer?

It isn't all as rosy as it seems.

First of all, NO, the mobile phone isn't free; it's a hidden cost and a big
one as we will soon see.

Second, you pay a hefty Rs. 3,000 as Club Membership fees, which entitle you
to receive privileged services like game downloads, ringtones, and a more of
such freebies. A marketing booklet with discount coupons worth Rs. 1 Lac
also comes along (come on Reliance, a Mid-Day newspaper does a better job at
giving us free coupons).

Third, all the billing money for three years has to be pledged to Reliance
in the form of post dated cheques, or full upfront payment, and no, there
isn't a trial period for the service. If you choose to exit the plan in the
first year, no matter what the reason might be, you stand to lose the mobile
phone, club membership charges, and Rs. 100 from each of your post dated
cheques.

Fourth, all seemingly free services like Voice Mail, Call Divert, Call
Conferencing and Data Connectivity (Internet Services) are billed to you at
regular talktime rates according to Reliance's Website. As for those who
consider that airtime rates are quite cheap, let's analyze it a little
further.

Reliance bills at Rs. 1,800 per quarter, and the club membership of Rs.
3,000 is compulsory and non refundable. That makes a total of Rs. 24,600 for
three years. [3000 security + (1800 x 4 quarters x 3 years)].

In return you get 400 minutes of talktime free each month. i.e. 14,400
minutes for 3 years.

Divide the two and you will realise that each minute within plan limits ends
up costing you around Rs. 1.71 or Rs. 5.13 for a three minute standard call
. And once the plan's call time is up, you pay standard BSNL/ MTNL landline
fees. This implies that every call you make is getting you closer to bearing
the cost of owning the mobile phone.

Let's deduct the price of the handset from the amount you pay to Reliance
and see the difference. Reliance claims the phone costs around Rs. 10,500,
but we don't believe that is a fair estimate. Considering they buy it in
bulk and the options are fairly limited, let's place the price of the
handset at Rs. 7,600.

The total fee for the new plan without mobile phone will then amount to Rs.
17,000 (Rs. 24,600 - Rs. 7,600). The total cost-per- minute at Rs. 1.18 in
this case is still more than that of the basic telephony providers they vie
to replace.

Though cheaper than other mobile phone services, it is still costlier than a
landline. This, despite the fact that setting up a CDMA2000x1 network costs
less than landline based solutions, and the TRAI is offering Reliance a good
deal via free interconnect with BSNL/MTNL.

The quality and features, Reliance has been harping on will be seen in time.
But, some basic misconceptions which give the deal a greater than god image
can be cleared right away.

The SMS facility on Reliance phones is limited to sending and receiving
messages to Reliance phones only. It isn't possible to send or receive SMS
messages to/from standard GSM mobile phones. So SMS being free isn't too
good an option unless Reliance is a monopoly, which, if and when it becomes
one, will make them charge for it.

The low-cost STD calls too are for Reliance-to-Reliance phones only. If you
wish to call up a standard land line, you pay standard MTNL/BSNL charges.

All this, and a lot more needs to be explained in clearer terms for the
consumer to gauge how well this plan meets her data/telecom needs. Services
that Reliance claims it will offer need to be explained in a lot more detail
to make it clear to the customer about what exactly she's going to get. As
for whether the service would really deliver what it claims; only time will
tell.

We would rather sit back and watch the playing field level up, and then pick
the tried and tested option that has proven its performance.