Airtel's Call Drop Compensation Plan

            

Details


Case Code : CLMM120
Publication date : 2015
Subject : Marketing Management
Industry : Telecom Industry
Organization :Airtel
Length : 07 Pages
Teaching Note : Available

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

In September 2015, Indian telecom major Bharti Airtel announced that it would move to a more affordable pay-per-second plan for all its prepaid mobile customers in the wake of government’s warning to telecom service providers to compensate the customers for their call drops. Airtel’s decision to go in for a per-second billing option would provide great relief to customers who were earlier charged on a per-minute basis irrespective of whether the call got disconnected midway. As per the new per-second billing option of Airtel, the users would be charged based on the length of time they used the network. Industry experts observed that though Airtel’s per-second billing plan would benefit the users, it is not the best solution and that there need to be more stringent measures in place for addressing this issue.

Issues:

Understand the issues and concerns related to call drops.
Analyze the government’s plan for compensating for call drops.
Appreciate the move taken by Airtel in response to the government’s call drop concerns.
Understand the implications of Airtel’s per-second pricing strategy as solution against call drops.


Introduction

On September 21, 2015, India-based telecommunication company Bharti Airtel Limited (Airtel) announced that it was moving all its prepaid mobile customers to a per-second billing plan. According to Airtel, the move to the per-second billing plan was intended to provide relief to the customers, who were earlier being charged on a per-minute basis even when their call dropped midway. Airtel’s announcement came amid the concerns voiced by the Telecom Regulatory Authority of India (TRAI) over frequent call drops. The TRAI had proposed that the telecomservice providers should compensate the customers for their call drops and poor quality of services.The seriousnessof the call drop concerns led to TRAI examining whether the telecom companies had any tariff plans wherein the call drops actually incentivized or benefited the companies. ..

Key words:
Airtel,Call drop,Call drop compensation,Per-second billing plan,Telecom Regulatory Authority of India,“Pay For What You Use”,Per second pricing strategy,Prepaid subscribers





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