Thursday, August 23, 2012

Is Banning Texts a really effective and efficient move?

Banning text messages to a maximum of 5 each day for a 15 day period is something that might not just harm telecom companies for the ban period (15 days) but also in the foreseeable future.

As a prepaid (Pay as you Go) mobile phone user, I pay either in advance or at the time when I use the services. What I mean to say is, for example, if  I have activated a SMS pack (which allows me to send a pre-set number of free Texts each month) I will pay for that SMS Pack at the time of the activation of the pack, not at the end of the SMS pack validity. If government can make sudden unwarned moves, people would often refrain in future from relying more on text messages (or anything that they believe may be in the government's control) and may instead consider using internet and other online services more which are actually free of charge and most people these days use internet on their phones as well (2G or 3G services).

So thinking as an individual, I would think of my gain of not having to spend money on SMS packs for free / cheaper texts allowance or even send texts from my phone when I can get the same thing done without the need to even pay a dime as all my contacts are active on internet and have services like Whatsapp, Blackberry Messenger, Facebook Messenger and so on installed on their phones.

And even if I want to use sms services, there remains no reason to pay for those services to my service provider when I can actually stick with online services like and for normal text messaging services, as in case even if government makes another stupid decision, I won't make a loss of having already paid for services that I can't use.

Such a move towards online services would not only take away India's revenue generation stream from Telecom services but also harm the goodwill of the telecom and the government in the long run as the government stands itself as a unreliable force which could prove brutal anytime unexpectedly.

Various individuals ranging from people living in small towns / villages, students to high profile business individuals spend a considerable fortune on such telecommunications services. Now if they are once put off by such awkward highly unpredictable moves, what guarantee can government officials give that they won't harm revenues for telecom companies for the foreseeable future.

Besides, harming revenues in long term, could lead to various other consequences like economic downturns, loss of jobs and even divestment in our (Indian) telecom companies by foreign individuals, entities and organisations.

Thinking from the telecom company's point of view. Its current profits and cash flows get harmed to the tune of $133 million (INR 7.34 billion) according to Financial Times article: Indian mobiles go quiet amid SMS curbs, this is what the telecom companies pay for government's not so intelligent move, but what will be the future costs in terms of loss of goodwill and customer base after such an insensible decision by government.

The future cost will not be on the telecom operators alone but also on government in terms of tax revenues from these telecom giants as well as job losses and loss of demand for telecom services.

This raises question on not just government official's current decisions but also on their competency of being able to run nation's telecommunications system and may be other segments on which a country's infrastructure and its well being depends.