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Monday, July 11, 2016

'Data STVs may be offered with maximum validity of One Year to boost internet penetration in the country', TRAI invites comments of the stakeholders

Telecom Regulatory Authority of India (TRAI) has released The Draft Telecom Consumers Protection (Tenth Amendment) Regulations, 2016 for public consultation inviting comments of the Stakeholders.

'Data STVs may be offered with maximum validity of One Year to boost internet penetration in the country', TRAI invites comments of the stakeholders

The present regulatory regime governed by TCPR-2012 allows Telecom Service Providers to offer data services in the form of Special Tariff Voucher (STV) either exclusively or in combination of other tariff items with a maximum permitted validity of 90 days.

Requests have been received in TRAI seeking longer validity for data-packs (i.e, Special Tariff Vouchers with only data benefits) primarily to address the concern of marginal consumers of wireless Internet who prefer lower denomination data packs with longer validity.

After examination of various aspects of the issue, the Authority feels a longer validity of 365 days instead of the current 90 days could be beneficial for marginal consumers, first-time users and price-sensitive consumers. The proposed amendment to the TCPR thus, envisages that an STV with "data only" benefits would be allowed to be offered for 365 days validity instead of maximum 90 days allowed now. 

The set of new prepaid consumers on any service provider’s network comprises of the following categories:
  1. First-time mobile consumers; and 
  2. Consumers who have migrated from some other service provider’s network.
A significant portion of both of the afore-mentioned categories of consumers are relatively more price sensitive than an average pre-paid consumer. The service providers devise strategies to serve such consumers through cheaper tariffs to ensure long-term loyalty. Nevertheless, such consumers keep looking for more attractive offers in the market. As a result, the churn-rate for such consumers is much higher than the churn-rate of average prepaid consumers and apparently the average lifetime of a new prepaid mobile connection is in the range of six months to a year. 

It is expected that allowing "data only" STVs to have validity up to 365 days, would provide more flexibility to the service providers to offer innovative data products. The consumers, who use less of data services than average and those, who are presently not using any data services are likely to be the primary target consumers of such longer validity STVs. If the service providers make available attractive products of this kind, many first-time data users would be induced to try consumption of data services as they may not be required to activate voucher frequently because of longer validity. This is likely to boost Internet penetration in the country and, in turn, would reap socioeconomic benefits to the country. 

Such STVs providing "data only" benefits must satisfy all conditions of a STV as specified in TCPR, 2012 including that these shall not be offered in denominations of Rupees 10 or multiples thereof. The stakeholders are requested to furnish their comments on the Draft Telecom Consumers Protection (Tenth Amendment) Regulations, 2016.

Dear readers, please share your views and opinions about this latest news via comments with us. Whether longer validity data packs will increase internet penetration in India?

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