Writing in India’s leading business daily The Economic Times last week, V Raghunathan, CEO of GMR Varalakshmi Foundation, complains about the exorbitant data charges levied on business travelers when they use their mobile devices to download emails during their overseas trips.
Frustrated by lackadaisical response from his mobile network operator, the author turns to TRAI, India’s telecom industry regulator, for redressal.
When he draws a blank even from TRAI, he uses his article in the ET for “cathartic effect”.
For lesser mortals who face similar problems but don’t have the benefit of venting it out in leading newspapers, there’s the blog!
Here goes:
From: S Ketharaman [s.ketharaman@gtm360.com]
Sent: 08 July 2009 22:52
To: ‘editet@timesgroup.com’
Subject: Letter to the Editor of The Economic Times
Dear Sir / Madam:
This has reference to the guest column titled “An Appeal To The Telecom Regulator” by V Raghunathan in The Economic Times edition dated 4 July.
His suggestion for mobile devices to be equipped with a feature that warns users with a PAUSE signal whenever they start using their handhelds in a foreign country is very interesting.
Having accessed data on mobile devices in the UK, Germany and the USA, I can confidently say that exorbitant data charges outside home country is not an issue unique to Indian overseas travelers. A couple of years ago, a customer from the UK, who never exceeded his monthly fixed fee of GBP 29 for his 3G data plan while inside the UK, got a rude shock when he received a bill for GBP 400 for the one month that he had visited India and downloaded not fewer than 50 emails during his entire stay of five days.
Since data is one of the value added services that telecom companies are betting on to offset declining conventional voice-based average revenue per users, I doubt if they will ever get together to arrive at a “more reasonable pricing” as Mr. Raghunathan muses. Even if they do, wouldn’t that be be deemed as “price fixing”, which is illegal according to antitrust / cartel laws in many countries?
Historically, it is true that competition keeps prices in check. But there is ample evidence to show that the band in which prices are kept “in check” is not necessarily “cost plus reasonable margin” as consumers tend to expect.
One more example: The ridiculously high “Not Sufficient Funds” (NSF) fees levied by banks in the USA. There are 4900 FDIC-insured banks in USA.
What competition does do is give consumers the choice of using alternatives like hotel WiFi connection. (Having stayed in London hotels that charge GBP 14 per hour or GBP 40 per day for in-room WiFi connection, the USD 20 figure mentioned in the article is certainly not universally applicable.)
Since we can be reasonably sure that telecom companies are not going to be too eager to do anything about their high overseas data costs, turning to regulators might be the only option, as the author has done. But, even assuming that regulators deign to respond to a common man’s plea, it is questionable how far they can help.
After all, the Indian regulator TRAI only has control over the prices of Indian TELCOs. Regulators in developed countries tend not to interfere with pricing. As long as telecom companies declare their prices transparently, regulators can’t stop them from charging “what the traffic can bear”.
Sincerely yours,
KETHARAMAN SWAMINATHAN
Founder CEO
GTM360 Marketing Solutions Private Limited