Dream Come true for Hundreds of Millions of Phone Users - Call Rates @ 10 paisa Per Minute

To the hundreds of millions of phone users, the Minister for Communications and IT, Mr A. Raja, has held out another incredible promise: local calls at just 10 paise a minute, and national calls at 20 paise. That is verily one hundredth of the tariff 14 years ago when mobile phones were launched. Whether the call charge per minute descends to 10 paise is beside the point, and one must also take into account the fixed monthly charge consumers bear, but calls can become trul y cheaper if the Ministry can ensure the integrity of two main pillars of the policy framework: the rationalisation of taxes, and the sustenance of competition.

It requires no intelligence to infer that lower taxes mean lower call charges although the skew in tax rates between one kind of service and another needs to be smoothened out as that has been exploited unfairly by some service providers. What must be borne in mind is that the consistent increase in the level of competition over the years has been responsible for a secular decline in call rates. If rates are to go down further, the competition has to rise by another notch. The auction of 3G licences and the availability of more 2G spectrum are opportunities for the Ministry to bring in a few more players into the arena. If the spectrum is allocated fairly, transparently, and quickly — there is no need to wait till the end of the year — it will generate enough new competition to nudge tariffs down, and keep the flood of consumers coming: over 15 million new mobile phone users joined the network in just one month, March 2009, many more than the entire population of phone users the country had in 1997.

It would be tempting to think that all the hard work is behind us. On the contrary, the challenge over the next five years remains no less, for as more is accomplished, expectations are roused even higher. The phone has indeed come a long way from the days when only people in the metros could have access to it. Over the years, as tariffs drifted down, acceptance became wider; now yearning has become universal. Yet just about half the geographical area of the country is covered by the cellular signal. Leaving aside the quarter of the landmass that is forested and rightly must be saved from the cellular invasion, there is still another one-fourth of the country, albeit thinly populated, that needs coverage. The Ministry has enough money — the Universal Services Obligations fund has more than Rs 20,000 crore — to bankroll the erection of the thousands of cellular base stations needed to get the signals across to anyone who wants to be connected. The modus is what the Ministry must work out.

Source: Sify.com