Lifetime prepaids huge success: TRAI study

Lifetime prepaids huge success: TRAI study

Author | Source: Business Line | Wednesday, Dec 20,2006 8:32 AM

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Lifetime prepaids huge success: TRAI study

The lifetime validity scheme is providing an average revenue per user of Rs 218 compared with Rs 268 for the overall pre-paid card segment.

The pre-paid cellular cards with lifetime validity has become a huge hit with as many as 16 million subscribers taking the scheme since it was launched by mobile operators six months ago.

According to a study done by the Telecom Regulatory Authority of India (TRAI) to know the financial viability of the scheme, the operators are also not losing money by offering the lifetime validity as it was providing an average revenue per user (ARPU) of Rs 218 compared with an ARPU of Rs 268 for the overall pre-paid card segment.

Driving Force

"The results of the data analysis show the scheme has one of the factors responsible for the growth of mobile subscriptionsin the current year . At the same time, service providers seem to be getting a reasonable ARPU despite the fact that the scheme was primarily targeted towards low usage and marginal customers," the TRAI said.

Various operators launched lifetime validity pre-paid cards in December 2005 and January 2006. This scheme entitles subscribers to receive incoming calls for an indefinite period.

Certain apprehensions were expressed by some stakeholders regarding the viability of the scheme since the plans contained features that permit subscribers to continue receiving incoming only for as long as 6 months. "It was felt that the viability of such schemes should be examined based on operators data on traffic/revenue etc. Therefore, the data was collected from the service providers for the period from January 2006 to June 2006," the TRAI said.

Frequent recharge

The TRAI said that 51 per cent of the users on lifetime scheme were newly acquired subscribers and the rest were the existing subscribers who migrated to these schemes. On an all India average, 72 per cent of lifetime scheme subscribers were reported to have recharged every month, despite having the facility to charge only once in 6 months.

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