Kiev Cellular Tariff Stratagem Example

written by Alexander "Top Cat" Stcheblikin, 2/10/03

This paper is meant to unveil the situation 0 from guileful stratagems of cellular providers operating in Kiev, Ukraine.

Customers in this area have seemingly huge amount of tariffication plans available to choose from nowadays. Most of these plans emerged quite recently, but most customers presumably cannot advocate them as those aimed towards user's interests. Prices customarily don't lower. Or at least, cellular expenses people bear, don't lower. But the point here is the instability of the process of plans development. This makes it more difficult to compare plans from different providers. People just didn't have an opportunity to know about new things.

Fortunately, there is a hack about different providers' plans comparison. The solution lies in comparing prepaid plans. They've proved to be rather stable over past few years. Besides the fact that absolutely no personal identification or other papers other than bank notes are required to subscribe for the service made the thing to the top of popularity.
One notable feature of the service is fairly simple tariffication rules (from customer's point of view). Basically, you pay as you talk, there are almost no such skews as in some plans when the actual cost of a minute of airtime can fly to a sky-high $1 or even higher.
All the major cellular providers have presented prepaid subscriptions.
So, the choice is perfectly appropriate for the purpose of providers' comparison. It also happens to be a good bit representative of providers' tariffication stratagems.

Here I have prepared some charts. I thought one of concerns for the average customer might well be the CPM - Cost per Minute. The charts show how much a minute of airtime costs to that customer depending of the talk duration.

The following assumptions have been made:
a) the average customer most of the time uses his or her mobile phone to receive incoming calls;
b) the customer is a "normal" human and conducts most of phone talks during peak hours, i.e. when most people don't sleep;
c) most calls are local and in most calls one of the parties is on the landline;
d) since the plans we're considering are prepaid it is adequate to believe that that customer's calling parties are mostly friends and family members, so we must account for all parties' talk costs, not only those the cellular user incurs;
e) all the nuances of billing are accounted for very carefully: hidden taxes, free seconds, charge periods, differing exchange rates, etc...

The choice of particular prepaids hence was simple: KievStar's "ACE" and Golden Telecom's "UNI"
Another prepaid - UMC's "Master" is very close to "ACE" in its stratagem, only couple percent more expensive. Besides, it has left the scene recently, only old users may use "Master", no new subscriptions are being issued. The new plan intended to substitute "Master" - "Comanda" - is almost twice as expensive as "Master" and is supposed to be appealing only to those pitiable willing to communicate exclusively within provider's network.
Ok, now, let's move to the interesting part...

Some final comments might show useful.
The principal distinction between "ACE" and "UNI" is the distribution of talk charges between calling and called parties.
Whilst person calling a UNI subscriber makes purely local call which costs almost naught (in order of $0.005 per minute, to be precise) and virtually can be ignored, the one calling an ACE subscriber pays substantial amount of money as for long-distance call (ACE subscriptions are not available with local phone numbers). This circumstance made me made two graphs for ACE: the one showing CPM from the point of view of the ACE subscriber and another, showing CPM charged for caller and call receiver summed.

And, in the case you didn't know, here are CPMs for incoming calls for ACE and UNI advertised in the wild market:
ACE $0.24/min, UNI $0.36/min.

CPM Graphs

Note: Currency exchange rates and other money-related parameters used in calculations are as of 12/25/02.

© 2003, Alexander "Top Cat" Stcheblikin. All Rights Reserved.