Sucheta Dalal :So how much does sending an SMS really cost?
Sucheta Dalal

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So how much does sending an SMS really cost?  

July, 26, 2002

No wonder people are willing to pay so much for celebrity endorsements. It is only when the beautiful Shobhaa De -author, columnist and a self-confessed SMS junkie - was slapped with a Rs 27,000 bill on her cellular phone that we too learnt a few things about how SMS messages are billed.

Based on an advertising campaign by the phone companies it was assumed the cost of sending an SMS was Re 1. The low cost per message set off an SMS epidemic of addictive messaging whose only cure was a fat phone bill. I spent the better part of last week finding out about SMS billing, grievance redressal mechanisms and international experience to the point where this column is badly delayed.

For those of you who are as ignorant as I was about SMS charges - here are some basics.

First, SMS messages cost Re 1 as advertised, only if you send them out of your home city. Charges vary between Re 0.50 (in cities such as Chennai, et cetera) to Rs 1.50 (for AirTel and Escotel subscribers). When you travel the costs change. It is Rs 3.00 across the country and various operators, plus service charge. This usually adds up to approximately Rs 3.24 per SMS (incoming messages are free).

But, it is international messages that would truly curb your urge to punch the keypad. While it costs just Re 1 to SMS abroad, the service turns hugely expensive when you are abroad and messaging home. Foreign networks have their own rates and with multiple options and foreign exchange fluctuations, what you pay could be different everyday.

That is where Shobhaa had here problem. Automatic roaming switches a user between different service providers, based on the strength of signals at each location. In Thailand, for instance, the rates of various operators varied between Rs 12.54 and Rs17-18.

The phone companies suggest that you call them or look up their Web site for SMS rates when you travel abroad. It helps you select the cheapest network, too. Fortunately the number of people having to worry about global roaming tariffs is rather small.

The point of this little tutorial is only to highlight how people know little about cell phone tariffs but are usually fairly up-to-date on e-mail scares and other nonsense.

Most of you would have received helpful messages asking you not to answer calls when the word 'ACE' is displayed on the phone screen. It is allegedly a cell phone virus that destroys the SIM card and the telephone. After a dozen such warnings, I asked top executives of BPL Mobile about it and they simply laughed. The virus is a figment of some pranksters' imagination.

Next, there was this fancy, graphically illustrated warning about using mobile phones at petrol pumps which had some substance. It talked about people's faces being burnt off and cars catching fire because a cell phone was answered at a petrol pump while filling gas (we have never seen a real example).

Then on June 28, The Economic Times reported the government has ordered cellular phone users to "switch off their phones at petroleum retail outlets as it represents a potential ignition source to the flammable vapours which may be present in the atmosphere at retail outlets."

This decision, it said, was taken in view of the potential risk of accidents of fire due to ignition from the batteries of cell phones.

Well, it is better to be safe than sorry, I thought. Then on July 18, 2002, the same newspaper carried a letter from Michael Milligan, Secretary General, Mobile Manufacturers Forum of Brussels, which said: "…risk of ignition from cellular phone use at a petrol station is very remote."

The amount of radio frequency energy emitted from modern hand-held cellular phones is considered too low to cause a spark, which could ignite petrol fumes.

Shell UK Oil, in a report detailing a 1991 British Institute of Petroleum sponsored study on fuel ignition risks, said: "...portable cell phones properly used do not represent a meaningful hazard on the retail forecourt." Further, a 1999 report by Exponent Failure Analysis Associates had apparently concluded that "the use of a cell phone at a gasoline filling station under normal conditions presents a negligible hazard" and that the likelihood of such an accident under any conditions "is very remote."

So, are we exaggerating and overreacting?

Maybe. But as consumers using a new technology, we are still basking in the convenience and accessibility of the service and the higher service standards to worry about all the things that we normally would.

Mobile users happily suffer bad connections, dropped calls, inaccessible networks and pay higher charges for services that would have caused endless annoyance on a fixed line. Consumer protection groups are warning that such complacency is dangerous.

With competition hotting up again, tariffs are dropping and subscriptions galloping. The Telecom Regulatory Authority of India estimates that number of users is up from 1.14 million in 1999 to 6.4 million today.

Bharti's AirTel, the fourth operator in Mumbai stirred things up with an amazing introductory offer, including free SMS, national roaming on all AirTel networks at Mumbai airtime rates, 30 second pulse and free incoming calls from AirTel to AirTel across the country, plus more. Undoubtedly, the competition will fall in line and it would be bonanza time for Mumbai consumers.

But sometime soon, when the fourth operators across the country settle down and prices reach a low plateau the companies will have to focus on their bottomline rather than merely tying in customers.

And that is the time when international experience will begin to count. So take a look at some examples that will form a part of our future experiences. Some of these are from e-mail I received in connection with the growing debate in the United States about corporate ethics.

1. This one talks about a top US telecom company that has filed for bankruptcy. Our source says, "My experience with them as an ISP company was that they were thieves. They continued to charge my bank account for six months after I cancelled and ceased using them, and eventually reimbursed me for three months. The amount is trivial, but the ethics are clear. So who wants to bet that their books haven't been cooked ... probably boiled dry?"

2. Another relates to a torture technique that is catching on in India: cell phone telemarketing. The international experience is that telemarketing calls to cell phones drives people nuts - not only does it give the marketers access to subscribers anywhere (in the toilet or out on a holiday in the mountains), but also they even make you pay for their incoming calls.

Imagine the frustration of answering a telemarketing call when out of town and paying long distance charges for someone attempting to make a sale.

In India telemarketing on mobile phones is rather low key, but the Bombay Telephone Users Association has been receiving complaints from Mahanagar Telecom Nigam Ltd's Dolphin customers who suspect that the subscriber list has been sold to a tele-marketing company.

Consumer groups say that unsolicited cell phone spam which costs the subscriber money, should be recoverable from the company using telemarketing services. Subscribers are already suing telemarketers in the USA; too; four US states are planning legislative action against it and a bill barring cell phone spam has been introduced in Congress.

3. Other issues that have attracted litigation include gaps in cell coverage. A class action suit has been filed against Los Angeles Cellular Telephone Company for falsely and deceptively advertising its cellular coverage area to subscribers.

The company claimed to have seamless coverage over 30,000 miles, failing to mention that there were several gaping 'cellular holes' in the coverage. It had near fatal consequences for one subscriber who was mugged but could not contact 911 for help because she was in one of these gaps and had no connectivity.

4. In February 2000 the Oklahoma district court settled another nationwide class action suit for breach of contract and fraud in calculating the duration of incoming calls against Sprint.

Although over-billing per call was tiny, it added up to a neat packet over time to each subscriber and for the company. Sprint agreed to provide each member of the service with a long-distance calling card of $10 each which added up to $19 million to the company.

It is the last bit that really worries consumer activists. Unless the TRAI sets up an efficient audit mechanism, consumers could easily be at the mercy of service providers. As we have seen, even fractions of seconds can keep adding up to a big figure across the subscriber base.

The lesson here is to enjoy the freebies and the wooing by cellular companies, but don't lose sight of your rights as consumers or the ways in which we you can be gypped by them. It is when competition is intense and margins are wafer thin that temptation is the highest.

-- Sucheta Dalal