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SMS Costs Could Fall in India

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The cost of sending an SMS in India may be set for a substantial reduction if the telecoms regulator, TRAI decides it needs to regulate the tariffs. The regulator has long been wary of regulating tariffs, but recent media fuss over the cost of sending an SMS has pushed it into a review of the policy.

"We are going to issue a consultation paper to review telecom tariffs within 20 days to a month.", a TRAI official told The Economic Times newspaper. If regulated, then it is expected that subscribers can see the new tariff rates coming into effect by the end of Q1 2010.

According to the official, the move would have come sooner had the regulator not had its hands full with a consultation process on controversial 3G spectrum issues.

It is widely expected that plunging costs for sending SMS would lead to a huge spike in usage, much as happened in The Philippines, which has one of the highest usages of SMS in the mobile world. Such a move would also be a boon for SMSC vendors as the networks rush to upgrade their messaging capacity.

The newspaper claimed that the true cost of sending an SMS would never have come to light if new entrants into the Indian market had not been forced to sign interconnection agreements with existing operators at a price that is far higher than the actual cost.

On the web: The Economic Times

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Tags: sms  trai  true  India