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The mobile service market in India is crowded. There are more than fve

CMSPs in each circle and metro. They are acing intense competition and

working hard to gain maintain their market share. Along with the increasein

spply o mobile services! there is an improvement in "ality! which has

reslted in mobile service being treated as commodity like #ast Moving

Consmer $ood %#MC$&. The tari' o prepaid service is normally more as

compared to Post paid services. TheIndian mobile service market is very

price sensitive. The CMSPs are inventing price models to attract all segments

o cstomers. The CMSPs are o'ering activation and deposit waiver and ree

handsets to postpaid cstomers and ree validity and talktime to prepaid

cstomers.

The CMSPs have a well woven network or retailing the mobile services

throgh ( Company branded shops! distribtors! dealers! retailers and direct

sales agents %)SA&. In India two systems or pricing telecom services were

sed the *at rate and the measred rate. +nder the ormer! sbscriber has

to pay a f,ed monthly rental irrespective o the nmber o calls made. In the

latter! the sbscriber is charged a lower rental pls a sage charge per call.

The Measred system o pricing still contines. The tari' o the calls was

decided depending pon the time o origination o the call! day! distance!

dration! more the nmber o calls made by the ser higher the tari'. The

rental was decided on the basis o the capacity o telephone e,change rom

where the cstomer is served. The rental or the rral connections was low

as compared to the rban areas.

Diferent methods o Pricing

The prices are based either on costs or demand. The cost-based price

incldes a rate o retrn together with costs! i.e they ocs on economic

costs! which inclde a normal commercial retrn. In telecom! there are two

types o demand! one or accessing the network and other or sage! these

two elements is priced separately! and the impact o price on these two

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types o demand need be considered separately while deriving the price

models.

Innovations in pricingThe innovations in pricing o mobile services are driven by CMSPs. They are

o'ering the services in innovative price models! which are very attractive.

These innovations have contribted in the redction o the cost o ownership

and made mobile services more accessible or the low-income grop

cstomers.The ollowing innovative models or pricing new plans are adopted as

compared to plain vanilla tari' models sed in the legacy system.a. Incoming ree or lietime/ plans. In this plan the ree incoming calls

are allowed to the cstomers! i they recharge or a small amontevery si, months.

b. 0ne India tari' plan %1 rpee2min anywhere in India&. This plan is or

cstomers making heavy sbscriber trnk dialing %ST)& calls.

c. 0ne India 3oaming Plan. %1 rpee2min while roaming in India&. This

plan is or cstomers sing the national roaming services re"ently.d. The pre-paid cstomer can barter talk time mintes or e,tension o

accont validity.e. The availability and a'ordability o the micro refll copons in

varios denomination %e.g small refll o 3s.14 and validity e,tension

ate the rate o 3s. 52-per day&. 6ndling o mobile handsets with tari' plans! where the mobile

handsets are o'ered ree o charge.g. Attractive vale added services which are compatible with less

sophisticated handsets e.g voice based SMS in place o the te,t

based SMS and services on voice platorms or access to services on

voice in place o the SMS.

In recent times! the pricing has dropped down to almost 1 paisa2 sec. Thishad taken mobile to almost rock bottom prices. 7hen it was speclated that

this was the abyss! 8irgin mobile came p with the plan o cash back on

receiving calls. This is so ar the lowest o'ering rom any telecom company.

9owever! this o'ering cold not become so poplar.

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These days the ocs o service providers or profts have shited rom call

tari's to vale added services. There is a hge in*ow o di'erent kinds o

service o'ering rom service providers.:ven the technology boom in the mobiles have contribted to the shit o

ocs rom mere call tari's to profts rom vale added services.The mobile gaming indstry are contribting a lot to the profts o service

providers. Advent o 5$ technology seems to be a promising ventre or

service providers to reach new heights in revenes. 9owever! this will still

take some time to penetrate this technology to