Rcom launches 50p/min rate for all telecom services

Upping the ante in the telecom price war, Reliance Communications (RCom) will offer a flat rate for all calls on its network at 50 paise a minute. The scheme will replace all existing schemes.

“By launching this scheme, we are simplifying the telecom landscape in the country. There are a lot of tariff plans, around 2,500 at the last count, with different call plans and rates. These are confusing to the subscriber, and hence we have decided to launch one simple plan for all our services,” RCom President Mahesh Prasad told a news conference today.

Under the new scheme - 'Simply Reliance Plan’ – RCom will charge a single rate of 50 p every minute for all local, STD, incoming and outgoing roaming, and SMSes. The call rates would be applicable for all calls made from its CDMA, GSM or its landline phones.

The scheme, which opens for subscription on Tuesday, will be available for both CDMA and GSM services. Prasad admits there would be an initial impact on Average Revenues Per User (ARPUs) and revenues. However, this would be mitigated as subscriber additions happen.

RCom’s Chief Marketing Officer Nilanjan Mukherjee said the company intended to replace all its existing rate plans with the new scheme in six months. The company has 265 rate plans, which have now been put on hold. The Telecom Regulatory Authority of India mandates that every scheme launched has to run for a minimum of six months before being discontinued. Under this rule, RCom can only close its existing schemes after the mandatory six-month period.

The Indian mobile space has been witnessing a price war for several months, with companies like Tata DoCoMo launching one-second billing and pay-per-call schemes. MTS (the CDMA operator of Sistema Shyam) had also launched one-second billing, while telecom majors like Bharti Airtel and Vodafone-Essar launched competitive pricing.

According to a Mumbai-based analyst, RCom is reacting to schemes launched by competition. “This would pull down tariffs further, which have already fallen by around 33-50 per cent during the last six-eight months. The scheme is also launched to get more subscribers on its network before the new operators launch their services. With new operators coming in with new schemes, the tariffs would fall further,” he added.