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Consumers who have applied for connections from Tata Power are facing problems with issues related to meter change and security deposits
For the first time, consumers in Mumbai can now enjoy the right to avail services from the power utility of their choice. But this switchover from Reliance infrastructure (RelInfra) to Tata Power is coming along with its own crop of initial hiccups.
The interim order passed by the Maharashtra Electricity Regulatory Commission (MERC) on 15 October 2009 states that Tata Power will be allowed to supply power to those existing consumers of RelInfra who wish to receive power from Tata Power.
“I have not got the connection yet. I had applied for it on 13 July 2009. As per the MERC order, the switch has to take place on the meter-reading day. My meter reading was done on the 4th of this month, the bill was produced on the 7th of this month and for the joint meter reading, the officials from Tata Power and Reliance Power came later on the 10th. They could not connect me on the 10th, as my current bill was not paid, since I had received it only two days back. Later on enquiring with Tata Power I was informed that as my last bill was shown unpaid on the connection date, they could not do the switchover as RelInfra wants the last bill to be paid before the switchover takes place. Tata Power volunteered to make the switch within four days, once I pay my bill,” said Diana Dias, a customer with RelInfra who has applied for a switchover to Tata Power.
While clearance of the final bill from the earlier utility provider is one glitch in the switchover, settlement of the security deposit has turned out to be another. “I approached RelInfra and requested them to adjust my security deposit against my bill and (told them that) I would readily pay the balance along with the prorate payment till the day of connection. I was ready to pay for a couple of days extra also. At first they agreed to my offer and volunteered to tell me the exact amount to be paid, but the next day they turned me down. I haven’t yet given up since it was unknown to me and most impractical that I would have to pay a bill that I had just received, else my switchover would not take place,” Ms Dias added. She is not the only one with security deposit woes.
“RelInfra has to pay me an interest of 12.5% per year on the Rs1,460 deposit; that money has not been given to me either by cheque or (adjusted) in the bill,” complains another consumer Rakshpal Abrol, who switched over from Reliance Infra to Tata Power last month.
Sandeep Ohri, who has been active in pioneering the switchover of power from Reliance Infrastructure to Tata Power, got his connection easily, but not without the initial glitches. “I have been fighting for this switchover from the time the order was passed in July 2009. I had approach RelInfra several times to disconnect their services, but they refused to remove the meter. Tata Power had already provided me with a new meter; however, Reliance refused to remove the existing one. On being told that I would remove it myself, they threatened that they would implicate me under penalty for tampering of the meter. This was resolved later due to the intervention by MERC, with the interim order on how the switchover would take place,” said Mr Ohri.
“They knew I would take up the issue with MERC and hence my switching to Tata Power from RelInfra was smooth. It was done in twenty minutes,” added Mr Ohri.
However, Mr Ohri also adds that for various other customers, “Reliance is refusing to remove its meters. They are also spreading a lot of other misinformation and rumours that their tariffs are going to be reduced.”
“The tariff determination of all distribution licensees in the State is a prerogative of MERC. As a policy, RelInfra prefers not to react to rumours and speculations of committing any discount or tariff cut-down,” explained a spokesperson from Reliance Infrastructure in a response to an email from Moneylife.
“RelInfra even threatened a few people that if they do not pay the bill they will not allow a Tata meter to be installed for those who have already done the switch,” added Ms Dias.
Rakshpal Abrol shares a similar experience, “I have been receiving a number of phone calls over the past 15 days and they (Reliance customers) all have been facing the same problem of refusal from Reliance to change the meter.” Mr Abrol is the president of an NGO, Bharatiya Udhami Avam Upbhogata Sangh, working actively for clients who want to switch over from Reliance Power to Tata Power.
“The major problem right now is that of the final bill and security deposit. There are people who received the bill as per the date the joint meter reading was taken, but the security deposit was not adjusted in that bill. Reliance on one side is saying you go across the counter and pay the final bill by deducting the security deposit. The person at the counter says he is not informed, and would only accept full bill payment. Now, I get the news that they have not yet prepared the final bills. RelInfra mentioned that for receiving the security deposit, one should give an application letter stating the account number and the money would be transferred into the account on the seventh day. No cheques would be given. But this can be done only after the so-called final bills have been made and paid,” added Ms Dias, who is also the head coordinator and founder member of VOIC (Voice of I C Colony) which has taken up the initiative along with other local NGOs, in and around I C Colony covering around 10,000 consumers in Mumbai’s Dahisar and Borivali areas. The NGO aims at educating and helping these consumers take an informed decision for switching from RelInfra to Tata Power.
“However, we should give both the companies some benefit of doubt because it is their first time. But they should have had the required procedures in place, considering the switch has been in the pipeline since last three-four months,” Ms Dias concluded.
“RelInfra denies the allegations as they are misconceived and devoid of facts and reiterates that it is facilitating smooth migration of consumers to Tata Power (TPC) in accordance with the MERC guidelines on Operating Procedure for changeover dated 15 Oct 2009,” said the Reliance Infrastructure spokesperson. Officials from Tata Power have refused to comment on the issue, citing the reason of it being “a silent period” till 26 November 2009 on the interim order. As per sources, around 500 Tata switchover connections have been already given- Amritha Pillay [email protected]
While mobile number portability would help harassed subscribers to change their operators, for the mobile services providers it will result in high churn of subscribers
Finally, mobile subscribers across the country will be able to keep their 'beloved' number unchanged despite changing their service provider. Following an order by telecom regulator Telecom Regulatory Authority of India (TRAI), from 31st December onwards, mobile subscribers would be able to change their operators while keeping their number intact. However, according to some media reports, the move may be delayed due to technical issues like network up-gradation.
Mobile Number Portability (MNP) allows subscribers to retain their existing mobile telephone number when they move from one access provider to another, irrespective of the mobile technology—or from one cellular mobile technology to another of the same access provider—in a licensed service area. This means a CDMA subscriber can opt for other a GSM or CDMA service providers and vice-versa.
For subscribers harassed by their current mobile operator, this has come as a blessing. From next year they can simply hang up on their current operator and choose another one—whom they think will provide better services and lower tariffs. However, the subscriber must have stayed with the service provider for at least 90 days before he can transport his number to another service provider.
According to the TRAI notification, subscribers changing their services provider will have to pay Rs19 as porting charge to the recipient operator. However, TRAI has said that operators are free to charge any amount lesser than or equal to this charge. This would prove to be another headache for mobile operators, already reeling under pressure due to the tariff war. Many operators may provide this service free in order to increase subscriber base.
Although MNP is beneficial for both post-paid and pre-paid subscribers, according to analysts, lower porting charge would give further impetus to prepaid churn.
“The TRAI-notified porting charges (PC) is lower than our—and industry—expectations and this would boost higher uptake of MNP among the low average revenues per user (ARPU) segement, mostly prepaid subscribers, leading to higher churn rates than current 4.5%-8.0% per month at least in the short run,” said Anand Rathi Financial Services Ltd, in a report.
The regulator feels that the facility of retention of existing mobile telephone number despite moving to a new telecom service provider would help in increasing competition between the service providers and act as a catalyst for the service providers to improve their quality of service.
This also means that incumbent mobile operators would have to upgrade network quality and customer services which may result in higher capacity expansion and operating expenditure.
However, the ongoing tariff war has discouraged fresh investments from operators, except new players, due to longer payback periods. Many incumbent mobile service providers (MSPs) have not only put on hold their expansion plans but have also reduced capacity expansion (capex) provisions.
The aggressive launch and lower tariff plans from new entrants are not only snatching away customers but are also hurting the top and bottom line of incumbent MSPs. During the recent quarter, all mobile operators have reported a sharp fall in ARPU and minutes of usage (MOU).
Although MNP may prove to be more beneficial for both post-paid and pre-paid subscribers, the question over service quality of almost all mobile operators remains a pertinent one.
According to TRAI, during the April-June quarter, the performance of wireless service providers has deteriorated as compared to the previous quarter, in respect of call set-up success rate, call drop rate, response time to the customer for assistance, complaints and percentage of complaints resolved within four weeks.
So before being wooed by a lower tariff plan or offer, subscribers going in for MNP need to check with existing subscribers of the new operator about the service and network quality. Of course, the subscriber has got an option to switch back to his original operator, once this 24-hour period gets over, he will have to wait for another 90 days before going in for another switch.
-Yogesh Sapkale [email protected]
Monopoly position enables international behemoths Visa and MasterCard to levy exorbitant costs on client banks
The country’s central bank, the Reserve Bank of India (RBI), is considering putting in place a domestic card payment system that would handle all debit or credit card transactions in the country. If implemented, the new system would compete against international card associations Visa and MasterCard, who have a virtual monopoly in card transactions worldwide. These two players have access to superior technology and employ stringent practices that make settlement of card transactions a breeze for banks worldwide.
This position of strength enables the two giants to demand huge fees for their services from client banks. Banks thus have to pay a high cost for associating with Visa and MasterCard. So much so that there is no alternative for banks but to accept whatever charges these two players think fit to levy for their services.
The list of service charges is quite exhaustive. Apart from transaction charges, they have a plethora of other fixed charges including annual service charges, monthly maintenance charges and quarterly charges. These are levied irrespective of whether the cardholder uses the card. The problem lies in the fact that banks cannot transfer all these charges to the customer. They have to bear the costs themselves. A senior banking official said, “These organisations are exploiting their monopoly position and technological expertise. Our current agreement requires us to unilaterally accept any future charges that may be introduced. They dictate their terms and conditions; banks don’t have any say in the matter.”
Dhimant Roy Turakhia, assistant general manager, Bank of Maharashtra said, “This is a welcome move from the RBI. If the RBI is to introduce this system, it is going to be highly economical to the bank and also to the cardholders. The charges would come down to 10%-15% of current outgo. The profitability of public sector banks will also increase and the burden will also reduce to that extent. After all, we can only pass on limited expenses to our customers.”
The most astounding fact is that Visa and MasterCard are not liable to pay a penny to the government in the form of taxes. Essentially, they are earning truckloads of revenues which are entirely tax-free. Banks are supposed to pay the service tax on behalf of Visa or MasterCard.
The RBI has already established a National Financial Switch (NFS) which handles many domestic transactions for cash withdrawal. It has been operating since the last 18 months. For the same transactions, Visa charges more than 10 times what RBI asks from banks. RBI is also looking at establishing a PoS (point of sale) switch network for routing domestic card transactions. Currently, even domestic transactions are routed through a switch located outside the country. The Visa switch lies in the US as well as Singapore. However, for this new system to work, a 24-hour fund transfer mechanism will have to be put in place. The existing National Electronic Fund Transfer (NEFT) network operates during weekdays from 9 am to 5 pm and on Saturdays from 9 am to 12 noon. The RBI is also pursuing the suggestion to extend this network to work on a 24*7 basis.
–Sanket Dhanorkar [email protected]