Page 1 of 7
Vodafone Idea Ltd Comments to the TRAI Consultation Paper on
“Validity period of Tariff Offers”
______________________________________________________________________
At the outset, we are thankful to TRAI for giving us this opportunity to provide our
comments to the TRAI Consultation Paper on ‘Validity period of Tariff Offers’ dated May
13, 2021.
We would like to submit our detailed comments for Authority’s kind consideration, as
follows:
Issue-wise Comments
Question 1: Whether TRAI should intervene in the issue of validity period or allow the
same to be under forbearance?
and
Question 2: If the answer to the Question 1 is yes, then whether the TSPs be mandated
or merely advised to offer tariff (for PVs, STVs and CVs) for a specified duration?
VIL Comments to Question 1 and 2:
1. Most critical issue – Floor Pricing for Data services:
a. At the outset, we would like to first bring the attention to most critical issue i.e.
deep financial stress in the mobile sector and the massive investments it
requires to further roll-out networks.
b. For dealing with this issue, the Authority had issued a consultation paper on
Tariff Issues of Telecom Services dated 17.12.2019, related to fixation of Floor
Tariff. The comments placed on TRAI’s website shows that all TSPs supported
prescribing floor tariff for Data services. However, the Authority has not
concluded the consultation process as yet and has not prescribed any floor
tariffs.
c. Industry association COAI has also requested the Authority to conclude the
consultation process and prescribe floor tariff for Data services, with unanimous
views of its member operators.
d. While on one-hand industry is dealing with deep financial pressures, on the
other hand it requires massive investments for network roll-outs and upcoming
5G spectrum and its network roll-out.
Page 2 of 7
e. There has been a market failure in terms of rationalisation and tariff hikes to a
level which can sustain the industry and pull it out of the financial troubles. The
present tariffs are one of the lowest in the world posing survival risks, thereby
creating reasonable chances to duopoly market, if such lower tariffs are not
redressed.
Therefore, we request the Authority to take floor pricing for tariffs on first and
foremost priority, conclude the consultation process and prescribe floor tariff for
data services.
2. In prepaid tariffs, Pricing and Validity are tied together:
a. With regard to tariffs, it is important to look at all the components of a tariff
construct holistically and not in piecemeal. Tariff construct is basically a
combination of two components i.e. price and non-price (validity / benefits).
b. In case of prepaid tariffs, both pricing and validity are tied together, to make up
a final construct for the consumer. The validity issue can’t be dealt in isolation
by keeping the price issue unchanged.
c. For resolving one set of concerns, if the Authority is looking for intervention on
non-price component (i.e. validity) by removing forbearance, it is much more
imperative that the price component is also addressed in totality and the
Authority should intervene and remove forbearance to the extent of setting
floor prices for data services.
Therefore, we request the Authority to see the tariff related issues holistically,
thereby also intervening on the price component of the tariffs, removing
forbearance and prescribing floor prices for data services.
3. Exhaustive framework on Transparency
a. To ensure transparent information to consumers about the tariffs, the Authority
has prescribed provisions in TTO’1999 related to publication of tariffs as well as
various other regulations/directions viz.: Telecom consumer Protection Act,
2012, Directions related to tariff publications/black out day, Metering and Billing
regulation entailing a comprehensive Metering and billing audit.
b. Through above-said provisions, the Authority has laid an exhaustive framework
to ensure consumers have various means and modes to access and are provided
with, adequate and timely information about their applicable tariffs, both
before enrolling the service as well as post enrolment.
Page 3 of 7
c. Being committed to transparency to consumers, VIL has been following above-
said regulatory framework in letters and spirits and tariff information is being
provided to consumers in various stages, transparently and adequately through
various means like VI website, mobile app, SUK, tariff sheets, digital KYC journey,
printed material at PoS, 3
rd
party mobile apps, pull and push SMS, USSD etc.
d. Further, adequate reminders are sent to consumers towards the end of validity
cycle, so that consumer is not inconvenienced due to lapse of validity
unknowingly.
e. We also note that the Authority also acknowledges that transparency is being
maintained in informing tariff validity of 28 days, and has mentioned the same
at para 2.3 of the consultation paper under response.
f. Considering complete transparency being maintained by the TSPs, there is no
reason for intervention in tariff validity by the Authority.
Considering all above, we most humbly request the Authority that (a) to take up floor
pricing of tariffs as first and foremost priority, conclude the consultation and prescribe
floor tariff for data services; (b) no intervention is required on validity period.
Question 3: Whether the period to be specified should be considered as 30 days or a
month with requirement of tariff to be renewed only on the same date of each month
or separate tariff offers be mandated for 29/30/31 days in addition to the present
practice of offering tariff for 28 days?
VIL Comments to Question 3:
1. 28 days/week-based validity structure in existence for a decade:
a. The current practice of offering 28 days validity for prepaid recharges (or in
multiple i.e. 56/84 days) prevails in the market for almost a decade now. It was
being followed for rate cutters also before the advent of unlimited recharges.
b. As it is prevailing in market for many years, the customers are well conversant
with this structure of validity, which is in weekly multiples.
c. Any change to existing 28/56/84 days validity structure will be a massive change
and will require gigantic efforts in terms of consumer awareness, configurations
in billing systems, publications in own and 3
rd
party channels and retail channel
education.
Page 4 of 7
2. Better recharge journey in existing 28 days than in 29/30/31 day validity:
a. In case of 29/30/31 days validity offers also, the ‘days of a calendar month’ will
not be static as such, customers recharge renewal date will be random and keep
on changing month-on-month. Therefore, a 29/30/31 day validity recharge will
not be helpful but, instead may give impression of monthly validity to consumers
and create confusion.
b. Below table snapshot clearly explains customer’s recharge journey over a year
in case of 28/56/84 vs 30/60/90 day validities–
Table -1. Recharge Journey of different validity recharges, over a Year
c. As can be seen from above, since ‘days of a month’ are not static at 30 days,
customers recharge renewal date will continue to be change during subsequent
renewals, in both versions of validity. However, with 28/56/84 day packs,
customer renewal cycle will positively occur on the same weekday as that of the
earlier recharge.
d. Also, having tariff offers in 29 or 30 or 31 days in addition to 28 days, would stray
away from the goal of having a clear, concise and simplified set of offerings to
customers, and instead would clutter the offerings thereby leading to more
confusion.
e. Further, presently digital recharges constitute 45 to 50% of total recharges and
any 2/3 times increase of product offerings will lead to complexity of discovery,
identification and confusion to choose products on the digital media.
1 2 3 4 5 6 7 8 9 10 11 12 13
Rc Date 1-Jan 29-Jan 26-Feb 26-Mar 23-Apr 21-May 18-Jun 16-Jul 13-Aug 10-Sep 8-Oct 5-Nov 3-Dec
Weekday FRI FRI FRI FRI FRI FRI FRI FRI FRI FRI FRI FRI FRI
Rc Date 1-Jan 31-Jan 2-Mar 1-Apr 1-May 31-May 30-Jun 30-Jul 29-Aug 28-Sep 28-Oct 27-Nov 27-Dec
Weekday FRI SUN TUE THU SAT MON WED FRI SUN TUE THU SAT MON
Recharge
validity
category 1 2 3 4 5 6 7
Rc Date 1-Jan 26-Feb 23-Apr 18-Jun 13-Aug 8-Oct 3-Dec
Weekday FRI FRI FRI FRI FRI FRI FRI
Rc Date 1-Jan 2-Mar 1-May 30-Jun 29-Aug 28-Oct 27-Dec
Weekday FRI TUE SAT WED SUN THU MON
Recharge
validity
category 1 2 3 4 5
Rc Date 1-Jan 26-Mar 18-Jun 10-Sep 3-Dec
Weekday FRI FRI FRI FRI FRI
Rc Date 1-Jan 1-Apr 30-Jun 28-Sep 27-Dec
Weekday FRI THU WED TUE MON
84 Day
Variant
90 Day
Variant
Recharge Number
Recharge
validity
category
28 Day
Variant
30 Day
Variant
56 Day
Variant
60 Day
Variant
Page 5 of 7
f. We have also taken feedback from our customer care centres about
concerns/requests from consumers requesting a 30/60/90 day recharging cycle
for ease of recharge however, no such substantial concerns or requests have
been noticed.
3. Technical system designed for Validity as fixed number of days
a. As prepaid offerings in fixed number of days is existing for almost two decades,
our technical system viz. primarily IN system, are designed and evolved over
years, for configuration of prepaid offerings with validity as fixed number of days
like 7/14/28/30 days validity.
b. In our present IN system, it is not feasible to set the due date for next recharge
to be on the same date (as of initial recharge) in the subsequent month,
irrespective of the number of days in the month.
c. Thus, there would be technical limitation in existing systems for supporting
recharge which has validity expiry on same day every calendar month in a year.
4. We would also like to state that upon checking websites for practice being followed
by telecom operators in different countries, we have found various examples
wherein the product validity is mentioned as monthly, however the actual validity
of the products provides 30 days of validity, irrespective of the number of calendar
days of a particular month. The website link of such Operators are provided as
below.
Operator
Country
Validity
Followed
Weblink
Singtel
Singapore
7/28 Days
https://www.singtel.com/personal/products-
services/mobile/prepaid-plans/data-plans
Maxis
(Hotlink)
Malaysia
30 Days
https://www.hotlink.com.my/en/plan/hotlink-prepaid-unlimited
Vodafone
UK
30 Days
https://www.vodafone.co.uk/mobile/best-sim-only-deals/pay-as-
you-go-sim
Vodafone
Italy
30 Days
https://www.vodafone.it/eshop/tariffe-e-prodotti/tariffe/tariffe-
per-tablet-pc-e-
chiavette.html?icmp=MDD_sim_tablet_pc_chiavette
Vodafone
Portugal
30 Days
https://www.vodafone.pt/internet-movel.html#tarifarios-cartoes
Etisalat
UAE
7 Days
https://www.etisalat.ae/en/c/mobile/plans/prepaid-
plans.jsp?catName=Prepaid_plan&listVal=Prepaid_plan
Further, the above table also shows different validities of products in different markets
globally e.g. in case of Singtel (Singapore) it offers weekly and four weekly packs too.
Page 6 of 7
With regard to the examples of global telecom operators and their countries being
quoted in the consultation paper, largely have postpaid consumer segments and
operate mostly with contract based arrangements therefore, may not be a comparable
example for India telecom industry.
5. We would like to submit that similar to Postpaid, a 30 day month cycle would not
solve the purpose in case of prepaid, since all the days of a month are not equal to
30 days. Unlike in Postpaid, it is not feasible to have a billing cycle concept for
prepaid, so customer would have to recharge on a set date to renew services.
6. Having week based recharges of 7/14/28/56/84 days validity creates a very clear
validity structure and enables consumer to quickly and easily compare between the
MRPs of different tariffs and opt for higher or lower validity recharge, as per
requirement.
Therefore, we recommend that the market should continue on the present 28
days/week based recharges and no mandatory provision should be prescribed for any
specific validity recharges.
Question 4: Whether on the lines of a monthly offering, the other periods viz.,
quarterly, half-yearly and yearly prepaid tariff offerings be mandated or just the
monthly offerings be required?
VIL Comments to Question 4:
1. Existing offerings
a. In the current tariff offering in market, there are already offers with higher
validities, like in case of STVs/CVs varying from 1-90 days and for Plan Vouchers
of 180 days and more.
b. On a sample PAN India basis, please refer the following examples of available
tariff recharges varying between 1-90 days, 180 days and 365 days validity:
Validity
28 Days
28 Days
56 Days
84 Days
180 Days
365 Days
365 Days
Page 7 of 7
2. Insignificant uptake of higher validities: As per our analysis, there is very less
consumer uptake of the recharge offerings with higher validities.
Considering above, we recommend that no mandate is required for other periods viz.
quarterly, half-yearly and yearly prepaid tariff offerings as options are available in
higher validities.
Question 5: If there are any other issues/suggestions relevant to the subject,
stakeholders are invited to submit the same with proper explanation and justification.
VIL’s Comments to Question 5:
1. Floor pricing for Tariffs:
a. As explained above, the most relevant question w.r.t tariff is to address the floor
pricing and help telecom operators come out of deep financial stress.
b. We most humbly request the Authority to take floor pricing for tariffs on first
and foremost priority, conclude the consultation process and prescribe floor
tariff for data services.
2. Increase in STV/CV validity limit:
a. Presently, only plan voucher can be provided for more than 90 days validity and
minimum 6 month validity.
b. Consumers are more familiar and comfortable with STVs/CVs recharge than with
plan voucher recharge which changes the tariff plan of a subscriber.
c. We request the Authority to consider allowing STV and CV with higher validity
i.e. till 180 days (beyond existing 90 days).
x-------------------------------------------End of Document-------------------------------------------x