Airtel’s datapack auto-renew is a smart revenue boost

NEW DELHI, INDIA: Airtel's had a little brainwave: data pack auto-renew.

It sounds perfect: a "reduction of data charges to increase usage" which adds at least Rs 500 crore to annual revenue (my conservative estimate: math below).

If you have an individual Airtel postpaid connection (not a corporate account), then this applies to you.

When you exceeded your GPRS or 3G data cap, you'd earlier simply be billed for actual usage per kB or MB.

Now, when your data cap runs out, they'll add 1 GB to your data cap, charged at your current pack rate.

I read this report in Medianama today, but then recalled reading an ET story on this a few days ago which had put it very differently: Airtel plans to cut data charges!

In response to my tweets, Airtel (which monitors social media rather closely now) called up to answer them:

Additional data beyond your pack limit will now be billed in 1 GB chunks, instead of the earlier 1 kB or 1 MB chunks.

NO USER CONSENT

So if your Rs 650/5GB pack runs out, then you instantly get billed Rs 130, with 1 GB added. If your Rs 250/1GB pack runs out, you get charged Rs 250, for the 1GB added.

This happens up to 3x of your original data limit. So if you had a 1GB limit at Rs 250, they'll keep auto-renewing up to 3GB (at Rs 250 and 1 Gb chunks) and then discontinue data service.

No user consent is sought for the data cap addition. You don't get an SMS alert or any other form of communication, unlike with Airtel broadband, where you get an alert as you near the limit, and you're ‘encouraged' to buy more data in their ‘Smartbytes' scheme. (Actually SmartBytes also works for 3G, but I don't know what will happen to it post this change.)

You don't have a choice in this. Even if you exhaust your pack on the 29th day of your billing cycle, 1 GB will be added, and the unused part will lapse on the following day when the new cycle kicks in.

Each such auto-renew will add over Rs 100 to the monthly bill, for 3G users. So let's do some conservative back-of-envelope math.

Airtel has over 200mn mobile subscriptions. It has over 10 million 3G users, and let's take only those 10 million, not the other 20-30 million GPRS users. If it gets a modest Rs 100 from half of those 10 million, that's 600 cr a year. Now, it's giving up a bit of revenue from the earlier per-kB/MB billing, so let's give ‘em Rs 100 crore for that. We're left with a cool Rs 500 cr ($83mn), with these very modest, conservative, numbers.

Now let's see what TRAI does about this-I suspect they'd have issues with automatically adding on data packs without user consent.

(This article was originally published in Voice & Data)