Monday, September 29, 2014

Why you should choose tariff based on call log?


The article will analyze the tariff plans and tries to help end user find the best way to pick a plan. This will not be a discussion on why or how such charge is fixed but discussion will be on available plans. I’m going to use my network –Airtel for analysis so this will benefit me. To explain my model I’m going to further simplify by choosing only Prepaid- Local call rate cutters for Chennai circle for same period.

Plan cost
Tariff
Period
Rs.23
1p/sec
28 days
Rs.46
40p/min
28 days
Rs.69
35p/min
28 days
Rs.85
30p/min
28 days
Table 154.1 Local Calls Tariff Listing

Naturally from this table you can see that the best plan is Rs.85 as it offers only 30 paisa per minute, while costly plan is Rs.23 as it’ll cost 60p per minute. But this interpretation seems very vague and this is what your network provider wants you to think – “The more you spend on cutter the more you save on talk time”.  But is this correct, how to decode? Let me help.

Catch: The use of the unit minute can be confusing so I’ll be replacing it with the unit call. Why? Because your network providers charges that way (per call basis), let us say your first call duration is 1min 20sec and second call duration is 1min 40sec then effectively they add up to 3 min so you must be charged for 3 minute, but every call is charged individually so you end up paying for 4 min. Actually this is not cheating given that you have accepted for terms and conditions, so any duration from 1 sec to 60 sec translate to 1min according to our service provider and to simplify this mess we are going to call this 1 call.

To decode the tariff we have to develop a tool that take tariff plan and calls made as input and provides overall cost as output. Welcome to Overall cost, we will henceforth use this term to point the total spending on the calls for the tariff period. To make our analysis streamlined we compare ‘per minute’ cutters and keep Rs.23 aside which is ‘per second’ cutter.
Overall cost (Rs.)= Tc + (Cm X Pc / 100)
Here, Tc is Cost of tariff which is the first part. Second part is call cost for individual calls, where Cm is no. of calls made in last 4 weeks i.e., period of tariff under analysis (ref Table 154.1); Pc – Paisa per minute from tariff plan. With this tool I’m creating projected overall cost for every tariff with different Cm and tabulating them for comparison with talk time measured in INR.

Table 154.2 Tariff comparison for analysis
The number of calls is in blue font and every tariff column carries its own font color, overall cost is in laurel green square(in INR). As highlighted in Table 154.2 only when you cross 461 call in 4 weeks i.e., more than 15 local calls a day and 10 more on weekend you reach the generic assumption of “The more you spend on cutter the more you save on talk time”. Furthermore you can feel the profound effect of the call cutter only when you reach 1000 calls in 4 weeks i.e., more than 35 local calls a day. Here you can also note that Rs.69 cutter is never beneficial and I have highlighted this point with green; Rs.85 drops in overall cost before Rs.69 and is costlier than Rs.46 till then. Rs.69 is a dummy addition and we have to choose either Rs.46 or Rs.85 to have good benefit.

With the above explanation I have made it clear that if you make less than 400 calls in 4 weeks Rs.46 is good, if you make more calls Rs.85 is best. Think again we have left Rs.23 from analysis and trust me it is difficult to compare; you can throw it away when you make many calls. But what if you make less than 200 calls? Rs.23 offers flats pay per second plan. Let’s analyze this with Rs.46 as this is the only contender, as one is p/s and other is p/m we can’t tabulate overall cost. Being an average caller I’m going to use my own call log as input – roughly 100calls in 4 weeks with 20% continuing even after 5 minutes, 40% ended before 40 second (say 30 second), 40% in second minute(say 1.5min).

So for Rs.26  = 26 + 20(300s*.01p) + 40(30s*.01p) + 40(90s*.01p)
And for Rs.46= 46 + 20(5*.30p)       + 40(1*.30p)      + 40(2*.30p)
Results?  Overall cost of 134 for Rs.26 and 112 for Rs.46, hence Rs.46 suits you if 60% of your calls cross 2 minutes.

Hence, If you are mundane caller or missed call party Rs.23 looks better.
If you are normal and 60% of your calls reaches 2 min mark then Rs.46 looks good.
If you are tele-calling animal Rs.85 is sexy.

For long I haven't published this though I made such analysis long back, Freakonomics gave me some confidence to push this into internet.