TRAI said that the charges for such SMS or calls should not be more than four times of the applicable local charges. Consumer organisations have welcomed the move but feel that the rates should be reduced further

The Telecom Regulatory Authority of India (TRAI) has ordered telecom service providers to put a ceiling on the premium rate services such as SMS and calls made to participate in TV or radio programmes. The sector regulator said that the charges for such SMS or calls should not be more than four times of the applicable local charges. Consumer organisations have welcomed the move but feel that the rates should be reduced more. 

Premium services are those which offer some form of content. It includes helpline services, voting, ring tones, gaming, participating in TV and radio shows, especially reality shows.

Anil Prakashan, president, Telecom Users Group, told Moneylife that, “It is a good decision. Earlier it was totally unregulated. At least there are some restrictions now. However, we still feel it’s high. For service providers it is a clear mode of revenue, hence the charges are high. Charges for such SMS and calls should be on par with the regular charges. Most of such shows entice people to participate.”

According to TRAI, unlike other premium rate services where the value of the content is substantial, the content element involved in the calls and SMS made for participating in competitions and voting, is minimal.

The telecom regulator also observed that service providers generally charge Rs2-Rs5 per minute for  each  call made  and  each  SMS  sent  to  participate  in  the  contest,  voting, survey and competitions. It held that while it  is  the subscriber’s choice to make or not  to make  such  calls/SMS,  an  unreasonably  high  price  results  in  undue gain to  the  service providers at  the  cost  of  the  customer.  

TRAI in its order stated that the present practice premium rate services are priced uniformly for subscribers of all plans, irrespective of the rates available in the tariff plan. There is no relation between the rates available in the tariff plan and those charged for such service. Hence it decided to put a cap on such calls and SMSes.

“The whole idea of such shows is money making. However, the restrictions that have been put are welcomed. Charging substantially high rates is clearly unethical. The revenue is often shared by the telecom players with third parties like the campaigner or the advertiser. But the cost is borne by the consumer,” says Hemant Upadhyay, advisor-IT & telecom of Consumer VOICE, an online magazine on consumer awareness.

Even TRAI stated that the revenue generated through the premium rate services is  shared  between  the  telecom  access  provider  and  the  content  service providers. It also clarified that it “does not intend  to restrict  the  growth  of  services  involving  content  nor  curb  the  revenue streams available for the service providers.”

The issue of higher charges of SMS and calls to participate in TV or radio show was also raised by the information and broadcasting ministry.  The ministry, in November last year, acting on complaints received from the viewers that quiz based television shows are charging hefty call and SMS rates to respond to their questions, issued an advisory to the Indian Broadcasting Foundation and the News Broadcasters Associations to come out with a specific guidelines for regulating such quiz shows and ensure transparency in them. As per the mandate, all the TV channels have to display the rate of these calls and SMS.

Randhir Verma, president, Chandigarh Telecom District Telephone Subscribers Association feels that, “Consumer education is required. They should clearly know what are the charges of such services and how are they calculated. It will help subscribers to make better choice. Awareness through the medium of advertisement, seminars is essential. Last year, TRAI has spent nothing on consumer advertisement.”