Bill shock hampering 3G uptake: Vodafone

Vodafone says operators are working to address this issue but it is still a work in progress.

GSM service provider, Vodafone has admitted that bill shock is one of the reasons for the slow uptake of 3G services.

"Subscribers are suspicious about bills and operators are working towards a strategy to combat the same," Viswanathan Ramaswamy, senior vice president - technology, strategy and architecture, Vodafone India, said recently at an event.

He further added, "Operators have to provide lots of reports and notices so that the customer can avoid the bill shock. And for most of the operators these kinds of implementations are still underway. We are also in the process of implementing this."

This is for the first time that any operator has admitted the issue of bill shock for slow 3G uptake in India. However, this was always well known to the operators right since the time they introduced 3G services in India and that"s why they capped the bill in certain plans, and even claimed that this was to prevent bill shock. But the cap was limited to only few plans.

However, operators always blamed it on host of other things like lack of information about benefits, lack of 3G enabled handset and also high prices of service, which they attempted to reduce and yet did not succeed.
On 3G prices, Ramaswamy said, "The number of 3G subscribers has gone up (after the drop in tariffs) but it still does not meet the expectations. It has not reached the numbers we originally had in mind."

So what is it that leads to bill shock?
Well the price differential between bundled and unbundled usage is huge. For example, most operators are offering 1 GB 3G data for around Rs 250. In case of unbundled usage, where the rate is at Rs 3 per MB, would cost the subscriber more than Rs 3,000 for the same amount of data. This means that mere 100 MB extra usage for a person with 1 GB pack will more than double his/her bill.

While Aircel has addressed this issue by converting all its 3G data plans to unlimited (with speed cap post certain usage), it is offering a mere 3.2 Mbps speed which half of what others are offering. Besides, Aircel is still a minor player in the Indian telecom market. RCom, a bigger player in the market, also have unlimited plans and very attractive unbundled pricing. However, it is limited only to its data card users and not meant for the smartphone users.

The three biggest players - Airtel, Vodafone and Idea Cellular -still offering 3G data unbundled and that too at very high rate of Rs 3 per MB.

If operators are really serious about addressing this issue, they need to lower the price of unbundled usage to a more reasonable level, say close to 30-40 paisa per MB which Reliance and Tata CDMA (Photon) has done for few plans.