TO BE PUBLISHED IN THE GAZETTE OF INDIA
EXTRAORDINARY PART III SECTION 4
TELECOM REGULATORY AUTHORITY OF INDIA
New Delhi, the 20th April, 2012
THE TELECOMMUNICATION TARIFF (FIFTY FIRST AMENDMENT) ORDER, 2012
No. 2 of 2012
No. 301-26/2011-ER.— In exercise of the powers conferred upon it under subsection (2) of section 11, read with sub-clause (i) of clause (b) of sub-section (1) of the said section, of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997), the Telecom Regulatory Authority of India hereby makes the following Order further to amend the Telecommunication Tariff Order, 1999, namely: -
1. (1) This Order may be called the Telecommunication Tariff (Fifty First Amendment) Order, 2012.
(2) This Order shall come into force from the date of its publication in the Official Gazette.
2. In clause (2) of the Telecommunication Tariff Order, 1999 (hereinafter referred as the principal tariff order), after sub-clause (k), the following sub-clause shall be inserted, namely:-
‗(ka)‘ ‗Premium Rate Service‘ or ‗PRS‘ means service for which charges are levied at rates higher than the rates applicable to the consumer as per his tariff plan.
―Provided that every service provider providing cellular mobile service shall offer to the subscriber at least one pre-paid and one post-paid Tariff plan with pulse duration of one second for local and national long distance calls.‖
5. In sub-clause (vii) of clause 6 of the principal tariff order, after para (c), the following proviso shall be inserted, namely:-
―provided that nothing contained in this sub-clause shall apply to the calls terminated outside the country‖.
6. After Schedule XII to the principal tariff order, the following Schedule shall be inserted, namely:-
(See Clause 3)
Tariff for Premium Rate Services
||Calls made to participate in contests and competitions and to vote in television and radio programmes.||Four times of the applicable local call charges in theTariff plan opted by the
subscriber, as ceiling.
||SMS sent to participate in contests and competitions and to vote in television and radio programmes.||Four times of the applicable SMS charges in the Tariff plan opted by the subscriber, as ceiling.|
|All other matters relevant to tariff for Premium Rate Services.||Forbearance.‖|
Note. 1. – The Telecommunication Tariff Order, 1999 was published in the Gazette of India, Extraordinary, Part III, Section 4 under notification No.99/3 dated 9th March, 1999, and subsequently amended as given below:-
|Amendment No.||Notification No. and Date|
|1st||301-4/99-TRAI (Econ) dated 30.3.1999|
|2nd||301-4/99-TRAI(Econ) dated 3 1.5.1999|
|3rd||301-4/99-TRAI(Econ) dated 3 1.5.1999|
|4th||30 1-4/99-TRAI(Econ) dated 28.7.1999|
|5th||301-4/99-TRAI(Econ) dated 17.9.1999|
|6th||30 1-4/99-TRAI(Econ) dated 30.9.1999|
|7th||301-8/2000-TRAI(Econ) dated 30.3.2000|
|8th||301-8/2000-TRAI(Econ) dated 3 1.7.2000|
|9th||301-8/2000-TRAI(Econ) dated 28.8.2000|
|10th||306-1/99-TRAI(Econ) dated 9.11.2000|
|11th||310-1(5)/TRAI-2000 dated 25.1.2001|
|12th||301-9/2000-TRAI(Econ) dated 25.1.2001|
|13th||303-4/TRAI-2001 dated 1.5.2001|
|14th||306-2/TRAI-2001 dated 24.5.2001|
|15th||310-1(5)/TRAI-2000 dated 20.7.2001|
|16th||310-5(17)/2001-TRAI(Econ) dated 14.8.2001|
|17th||301/2/2002-TRAI(Econ) dated 22.1.2002|
|18th||303/3/2002-TRAI(Econ) dated 30.1.2002|
|19th||303/3/2002-TRAI(Econ) dated 28.2.2002|
|20th||312-7/200 1-TRAI(Econ) 14.3.2002|
|21st||30 1-6/2002-TRAI(Econ) dated 13.6.2002|
|22nd||312-5/2002-TRAI(Eco) dated 4.7.2002|
|23rd||303/8/2002-TRAI(Econ) dated 6.9.2002|
|24th||306-2/2003-Econ dated 24.1.2003|
|25th||306-2/2003-Econ dated 12.3.2003|
|26th||306-2/2003-Econ dated 27.3.2003|
|27th||303/6/2003-TRAI(Econ) dated 25.4.2003|
|28th||301-51/2003-Econ dated 5.11.2003|
|29th||301-56/2003-Econ dated 3.12.2003|
|30th||301-4/2004(Econ) dated 16.1.2004|
|31st||301-2/2004-Eco dated 7.7.2004|
|32nd||301-37/2004-Eco dated 7.10.2004|
|33rd||301-31/2004-Eco dated 8.12.2004|
|34th||310-3(1)/2003-Eco dated 11.3.2005|
|35th||310-3(1)/2003-Eco dated 3 1.3.2005|
|36th||312-7/2003-Eco dated 2 1.4.2005|
|37th||312-7/2003-Eco dated 2.5.2005|
|38th||312-7/2003-Eco dated 2.6.2005|
|39th||310-3(1)/2003-Eco dated 8.9.2005|
|40th||310-3(1)/2003-Eco dated 16.9.2005|
|41st||310-3(1)/2003-Eco dated 29.11.2005|
|42nd||301-34/2005-Eco dated 7.3.2006|
|43rd||301-2/2006-Eco dated 2 1.3.2006|
|44th||301-34/2006-Eco dated 24.1.2007|
|45th||301-18/2007-Eco dated 5.6.2007|
|46th||301-36/2007-Eco dated 24.1.2008|
|47th||301-14/2008-Eco dated 17.3.2008|
|48th||301-31/2007-Eco dated 1.9.2008|
|49th||301-25/2009-ER dated 20.11.2009|
|50th||301-24/2012-ER dated 19.4.2012|
Note 2. – The Explanatory Memorandum explains the objects and reasons for the Telecommunication Tariff (Fifty First Amendment) Order, 2012.
Consultation Paper No.12/2010 on ―Certain issues relating to Telecom Tariff‖ was issued by TRAI on 13.10.2010 for seeking the views of stakeholders. This Paper had inter alia deliberated on various aspects of multiplicity of tariff plans and the need for improving transparency in tariff offerings. Having concluded the consultation process, the Authority has decided to issue required regulatory measures to further improve the transparency for protecting the interests of subscribers. These measures are being issued through; (i) amendment in Telecommunication Tariff Order (Fifty First Amendment); (ii) The Telecom Consumer Protection Regulations, 2012; and (iii) through two sets of Directions relating to publication of telecom tariff plans and preventing misleading advertisements.
4. In the light of demands from certain consumer organisations, the Authority again sought the views of stakeholders through the above mentioned Consultation Paper on the desirability of reviewing the ceiling on the number of Tariff plans, particularly on the following issues:
i) Whether „One Standard Plan, for all Service Providers, particularly for a prepaid subscriber would be relevant in the present scenario of Indian telecom market.
ii) Whether existence of large number of tariff plans are beneficial for subscribers.
iii) Whether there is need for revising the existing cap of 25 tariff plans on offer
5. Only a few stakeholders have suggested ‗one plan for all‘, while most other stakeholders have opposed the idea of ‗one plan for all‘. On the question of revising the existing cap, there were differing views. The stakeholders who support ‗one plan for all‘ or favoured further reducing the cap from the level of 25 have put forward the following supporting arguments:
- Mandating ‗One Plan for All‘ for prepaid subscribers would be the answer to the problems of prepaid subscribers.
- Multiple plans are confusing for subscribers.
- Large numbers of tariff plans do not provide real choice but only confusion.
- It will be difficult for an average subscriber to compare such large number of tariff plans and to find out which one is beneficial to him.
- Lack of transparency in the large number of tariff plans makes the choice for subscribers very difficult.
6. The stakeholders who opposed ‗one plan for all‘ and favoured either no cap or no further reduction in the existing cap have mainly put forward the following reasons:
- The single plan would be detrimental to the needs of consumers which are so dynamic and segmented and would not meet the requirements of different classes of consumers.
- Different tariff plans are designed to cater to specific segments of subscribers with unique needs and any curb on this flexibility would close the avenues for operators to innovate on new tariff plans.
- Mandating ‗one standard plan for all Service Providers‘ will work against the introduction of new innovative schemes! plans and customised benefits being provided to the subscribers.
- Enforcement of ‗one standard plan for all Service Providers‘ is against the basic principles of promoting competition and contrary to the individual human requirements and preferences.
- The ‗one size fits all‘ is anti-consumer.
- Different requirements of every consumer cannot be lumped together in one plan.
- More offers enables the customers to alter their usage pattern to better suit work! social! entertainment needs at affordable incremental cost additions.
Mandating one tariff plan on „Per Second Billing‟ basis.
Flexibility for revising ILD Tariff
(i) Increase in termination charges to several countries.
(ii) Increase in foreign exchange rate.
(iii) The factors relevant for deciding ILD tariffs are outside the control of Regulatory Authority in India.
(iv) The price freeze on all tariff items for lifetime customers without providing a corresponding guarantee that there shall be no increase in the input costs is unfair.
(v) A large percentage of subscriber base is in the lifetime prepaid category and the bar on increasing tariff for this category of subscribers is creating difficulties in recovering the cost of ILD business.
(vi) The termination charges for incoming international calls are specified in the IUC Regulation and the Indian service providers do not possess the equal opportunity to negotiate bi-lateral agreements on a reciprocal basis with their overseas counterparts.
(vii) In the case of ILD tariffs, the revision in tariffs is necessitated by commercial and financial reasons affecting sustainability of business, the same may not be considered as a case of arbitrary increase in tariffs which is intended to be barred by the 43rd TTO amendment.
15. In the context of the representations made by Service Providers and their Associations, the Authority decided to seek the views of stakeholders as to whether the hike in ILD Tariff could be made applicable across all subscribers including the existing lifetime subscribers. Therefore, though the above mentioned Consultation Paper the following issue was raised:“Do you think there is sufficient justification to allow the service providers to realign the ILD tariff in respect of existing lifetime subscribers in view of the grounds mentioned in their representations?”
16. The service providers as well as their associations have responded in affirmative to this question and have reiterated the submissions in their earlier representations and have drawn attention to the fact that the Authority revises prices for free to air channels for CAS areas to compensate operators for inflation. They have made some additional points, like;a) Tariffs are offered to the customers on the basis of existing costs and costs projected over a shorter period of time which cannot be frozen.
b) Whenever prices of utilities like gas, water, and electricity are increased, it is effective for all consumers irrespectively when the subscriber has started using that service.
c) The contractual agreement with the lifetime subscribers should be considered only for the local and STD usage which is under the control of the Indian service providers.
(a) An upfront payment of substantial amount, which was in the region of Rs. 1000/-, was payable by the subscribers for getting enrolled into the plan.
(b) No fair exit options were provided for the customers thereby restricting their ability of free choice of the plans on offer.
(c) The call charges applicable in lifetime plans were higher compared with the normal prepaid plans.
(d) Initially various optional packs/top-ups were not offered to the lifetime customers by many operators.
21. The Authority recalls that the Service Providers had raised certain objections at the time of Notification of 43rd Amendment. The objections were in the context of apprehensions by the industry that there could be unforeseen factors beyond their control that would affect the cost of provisioning of service in future. While addressing these concerns the Authority vide Para 7 of the Explanatory Memorandum of the 43rd Amendment had stated:
“… it is important to realize that the cost of providing telecommunication services is on the decline and thus the apprehensions raised in this regard of a possible hike in cost of providing services in future are untenable. The Authority is also of the view that in event of the apprehensions pointed out by the industry Associations becoming true, the provisions of this Amendment can be reviewed”.
The changes proposed to be effected at this stage are to be seen as the result of the review envisaged at the time of notifying 43rd Amendment.
Tariff for Premium Rate Services
25. Premium rate services (PRS) generally offer some form of content and include services like helpline services, competition, voting, ring tones, gaming etc. The services include both telecommunication services as well as non-telecommunication (―content‖) services, which are both billed by the provider of the telecommunication service. Access to PRS is through special members and charges for such services are levied at rates higher than the rates applicable to the consumers as per his tariff plan. The revenue generated through the PRS is shared between the Telecom access provider and the content service provider.26. Some consumer organisations had represented to TRAI against high usage charges and lack of transparency in provision of premium rate services. Particularly, attention of Authority was drawn to the issue of mushrooming growth of ―Pull SMS and ―Pull Calls for participating in competitions and voting organised through various television programmes and FM radios. With a view to exploring the possibility of prescribing regulatory measures to address the concerns of the consumers, this issue was included in the consultation process on ‗certain issues related to telecom tariff‘. The following Questions were raised for comments of stakeholders:-
- Should there any limit be prescribed on the rates for the premium rate SMS and calls? If so, what should be the norms for prescribing such limit?
- If not, what further measures do you suggest to improve transparency in provision of premium rate services to prevent the instances of subscribers availing such services without understanding financial implications thereof?
31. It is observed that the SPs generally charge Rs.2/- to Rs.5/- per minute for each call made and each SMS sent to participate in the contest, voting, survey and competitions. While it is the choice of the subscriber to make or not to make such calls/ SMS, an unreasonably high price results in undue gain to the SP at the cost of the customer. This leads to customer dissatisfaction and complaints. As per the present practice PRS is priced uniformly for subscribers of all plans irrespective of the rates available in the tariff plan. Thus, there is no relation between the rates available in the tariff plan and those charged for PRS.
32. In view of the above, the Authority has now decided to relate the charges for calls and SMS meant for participating in contests and competitions including for voting in television and radio programmes, to the rates available in the tariff plan of the subscriber. The tariff for such PRS as stated in this Order shall not exceed four times of the applicable Local call/ SMS charges. The Authority is aware that there are differential Local call rates in the same tariff plan for peak/ off-peak, on-net/off-net calls and SMS. For the purpose of ceiling tariff specified in this Order, the higher tariff for Local calls/ SMS applicable in the plan would be taken into account in situations where more than one rate is available. Similarly the free or discounted call/SMS charge, if any, provided for specific duration through Special Tariff Vouchers, shall not be reckoned for the purpose of the specified ceiling as these are not the rates applicable in the Tariff plan. Since the rates indicated are by way of ceiling, SPs are at liberty to fix any rate less than four times of Local call/SMS tariff.
33. As regards improving transparency in provision of PRS, it has already been mandated through the Telecom Consumers Protection Regulations, 2012 that every service provider providing or giving access to a Premium Rate Service shall ensure that the rate of such call is conveyed to the consumer through a voice alert prior to the materialisation of the call.