Riposte from Reliance on flat rate pricing for Internet

Posted on August 30, 2009  /  2 Comments

Few days back we heard that flat rate was the way forward. Here is the riposte, in words from experts (including LIRNEasia) and in new offerings from Reliance. Let the debate continue.

The experts see business sense around sachet pricing, especially for a low income group subscriber in the villages of India, who is mostly a prepaid user and does not have a big budget to spend. They say sachet pricing can yield results not only for Inetrnet penetration, but other services other than voice.

Rohan Samarajiva, CEO, LIRNEasia, a regional ICT policy and regulation research and capacity building organization, says for addressing the needs of Internet functionalities for the Bottom of the Pyramid (BOP) users, one need to understand one crucial thing that mobile and PCs are the best vehicle for IT-delivered services to rural India. He says the flat rate model does not fit the prepaid user. The operator should look at giving the user an opportunity to use Internet components at a low cost.

Amit Sinha, AVP, One97 Communications approves sachet pricing for increasing adoption VAS by subscribers in the rural areas. For a subscriber who does not have a very high balance on his prepaid account may not be comfortable subscribing for a particular value-added service for a monthly subscription.The adoption trends have been quite interesting. Reducing the sachet price from Rs 30 to Rs 10 can affect the VAS adoption by about 35-45%, he says.


  1. The main complaints to ISPs were: Slow speeds, High Price, Frequent disconnections; slow responses to complaints
    The Bangladesh Telecommunications Regulatory Commission (BTRC) has reduced

    Advertising standards for the operators should be defined: Misleading advertising of internet speeds has caused confusion. Heavy competition increases the likelihood of misleading advertising. We have also noted a practice among internet suppliers to advertise higher internet speeds and mobile internet suppliers to advertise base‐station speeds rather than what the user may actually experience. Inaccurate advertising prevents users from choosing the best package for his/her needs. Regulator intervention in specifying advertising standards can address the issue to a large extent. We hope BTRC will take its pioneering initiative forward on this line.

    We have observed that many service providers use the word ‘up to’ while advertising their broadband plans and do not indicate any committed minimum speed. This has led to rise in subscriber complaints. BTRC can instruct the ISPs to remove the word ‘up to’ from the tariff plans and to clearly mention the associated minimum download speed of the plan.

    All service providers should agree to remove the term ‘up to’ from their plan to avoid any confusion. Therefore while defining broadband speed we should only consider minimum guaranteed speed under the plan

    The subscription prices for broadband in Bangladesh are 240 times higher than in Korea, as the price of 100 KBps in Korea is US$ 0.25/month, as compared to the minimum of US$ 60/month in Bangladesh . However considering the respective purchasing powers of the two economies, this translates to 7200 times higher prices in Bangladesh .
    These were the minimum 1000 TK tariffs for unlimited (non volume based), shared 128kbps usage, installation and CPE for broadband DSL in Bangladesh. The minimum monthly tariff for a 128kbps volume based broadband connection in Bangladesh is Rs . 3500 TK. The per capita GDP in Korea is US$ 17,700 as compared to US$ 652 in Bangladesh.