India vs US in the cellphone service provider game

When you talk cellphones, you need to first consider three main countries – United States, China and India. These are the fastest growing regions for cellphones and the most lucrative. China has the highest mobile subscriber rate, closely followed by India. United States stands third but in terms of mobile penetration rate, it is the highest.

Mobile Penetration rate is the number of active mobile phones in a population. Given the tendency to have multiple phones and default subscriptions, it is natural that India has a lower penetration rate. But when one looks at the kind of US telecom laws vs Indian telecom laws, I wonder if we are going the scary US way.

This difference comes up sharply tonight, against the backdrop of T Mobile announcing that they are dropping their contract plans, offering free tethering and cutting those annoying voicemail messages down to the beep. 

Contracts were often considered the best way to get a fancy new gadget. Considering you pay the total bill off in installments, a $600 phone doesn’t feel that pricey. Of course, what most people did not notice, was that their bills did not drop even after the 2 year contract. A friend of mine who lives in the US argues that she rarely sticks to a phone for two entire years. She upgrades the  minute her contract is up, or sometimes earlier, so she never paid heed to this difference. I am no longer in touch with the market pulse of the US, but from what I know, not everyone does this. 

Regardless, the two-year contract seemed like a dream for us on the Indian shores and quite annoying on the US shores.

This contract system was introduced in India with the arrival of the iPhone. But in this context, the biggest service provider Airtel, expected you to pay up the entire INR 44,000 ($880) for the phone in a single payment and yet, you would be locked in for the same service provider. Why? That is just the way it plays, bro. 

Weirdly, several people signed up for this too.

The tariffs and packages… in 2002, cellphones were just entering the market. They were big, bulky and network charges were extremely high. Calls were charged at INR 12 / minute, an extremely high rate considering you could talk for half an hour on the landline for the same amount. Scarily, even incoming calls were charged and so were text messages. ‘Missed call’ became the fashion with everyone. Similar to a pager, you would give a single ring on a cellphone indicating you required a call back. Only emergencies, big shot politicians and real estate people carried around and actually spoke on cellphones.

Three years later, everyone had a cellphone. Service providers offered free text messaging to all the college students, leading to hours of illicit relationships and flirty messages. Call charges dropped and nobody was charged for incoming calls. It was 2005.

It is now 2013, and somehow, US seems to be stuck in the parody of being charged if someone calls YOU. It doesn’t matter who it is, but unless you are on an unlimited plan, you are supposed to pay for talking on your phone. Period. You pay to receive text messages. You pay to send text messages. You pay to retrieve your voicemail. And you pay a few extra cents listening to “if you want to send a page, please press #”. A page? Really? Surprisingly, the US telecom authorities aren’t keen to do much about this.

Of course, US subscribers do not really have to pay much for 3G like we do, nor do they have to pay if they travel out of state. 

“Roaming” was the key that service providers used in India to keep their revenues. That was where incoming calls were charged too. 

Given the intense rate of growth in India and hence, the competition, most service providers have been forced to lower their rates. I make calls from another state at the same price of a local call 5 years ago. And if TRAI is to be believed, this too will be gone soon.

We crib about many things here though… the high prices for 3G network, bad network and dropped calls. and TRAI’s new regulation of limiting the number of SMS. 

But as I remember more about the quality of network in the US and the kind of charges they pay for the same, I am grateful to TRAI and don’t mind the issues that much. Network is a problem that is faced by every growing country. Scams… well, they are a problem we’ve faced forever. Frankly, Airtel does need some competition and I’d be glad to see them taken down. 

Otherwise, least I do not have to pay to hear the nonsense someone else spouts.

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