Strange will be the telecom world in emerging markets.
Free incoming calls are the norm in many counties. Ever thought it can get even better? Operator paying the mobile users for incoming? Where on earth such crazy things happen?
Answer: In India.
Virgin Mobile pays 10 paise (about 0.25 US cents) for every incoming call minute a user gets. (In other words, boss calling to lecture you for ten minutes, will make you richer by one Rupee)
Where is the catch? Has Virgin Mobile CEO gone insane? Or does he mint coins?
Department of Telecommunication (DoT) India thinks Virgin Mobile can do that because its actual call termination costs are less than what it receives as termination charges– 30 paise per minute. Simple maths. If the costs are less than 20 paise, why not return the extra 10 to customers?
For those who are not familiar with the Calling Party Pay (CPP) scheme in India, termination charges are paid by an operator from whose network a call originates to an operator on whose network the call terminates. For instance, if a Reliance Communications (R-Com) customer calls a Bharti Airtel customer, R-Com will have to pay Bharti for the call. At present, the charges have been fixed at 30 paise per minute.
However, this has raised certain eyebrows.
Government is not happy because the innovative babus can call their little ones using office phone so that the child collects enough credit to do all his outgoings. No kidding.
Telecommunication Regulatory Authority of India (TRAI) is certainly not happy because it thinks the other operators are making ‘undue’ profits. Can termination costs be low just for one operator? If not, how much others are making?
DoT wants TRAI to modify cost structures, but this has not happened yet. So for some more time we can assume the clever young men (like the ones in the ad) taking advantage of gullible babus.