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War against the big premium SMS rip-off

Randhir Verma, president of the Chandigarh Telecom Subscribers Association, is all set to take on telecom operators over what he calls the ‘premium SMS fraud,’ reports Mayank Tewari.

india Updated: Jul 15, 2007 03:16 IST
Mayank Tewari

Randhir Verma, president of the Chandigarh Telecom Subscribers Association, is all set to take on telecom operators over what he calls the ‘premium SMS fraud.’

A premium SMS costs anywhere between Rs 3 to Rs 6 – unlike Re 1 for a local one, and Rs 2 for a national — and the cost is shared by the cellular operator and the media channel.

“Kaun Banega Crorepati”, for instance, generated 58 million SMSes over three months. Assuming a charge of Rs 3 per SMS, a total of Rs 174 million was shared by the TV channel and the cellular operator. So who is losing out? The consumer.

“This is open cheating,” says BS Sharma, president, All India Consumer Congress, another consumer forum. “If the subscriber is at the root of this money generation, then why don’t they get a share?”

Two weeks ago, Sarbajit Roy noticed his 7-year-old son trying to send an SMS to win a free trip to Singapore.

“I was shocked to see the “Pyjama Pakdo” contest on Hungama TV. Every time a child sees a pyjama on screen he is expected to send an SMS. The first child to send 100 SMSes could win a trip to Singapore,” says Roy, a telecom consultant who writes the popular blog Cyber Crime India.

“My son was very upset when he learnt that a boy from Hyderabad had won a trip.” The Telecom Regulatory Authority of India (TRAI), which registers consumer forums like the Chandigarh Telecom Subscribers Association, does not control the pricing of value-added services.

“We don’t interfere with the price mechanism of premium SMS-based services — this does not fall under the purview of the TRAI,” says TRAI chairman Nipendra Misra.

There is one more reason why telecom operators are getting greedy. The Average Revenue Per User (ARPU), as on March 31, 2007, is going down. Market leader Bharti’s ARPU, for instance, has come down to Rs 406 (quarter ending March this year), compared to Rs 427 in the previous quarter. Idea Cellular too has witnessed a drop: to Rs 317 from Rs 322.

Result? “Everyone is focused on value- added services (VAS),” says Kartikeya, president, content, Cellebrum, a firm that provides telecom operators with VAS packages. VAS, estimated to be worth Rs 4,950 crore in March 2007, is set to grow by over 65% and generate business worth Rs 8,200 crore by the end of this financial year, according to estimates made by the Assocham.

If consumers have a problem, they should take it up with a consumer court, says Misra since TRAI is not a content regulator.