Lifetime prepaid cards -- what's the catch?

It's a once in a lifetime opportunity.

Or is it? Cellular operators are trying to woo customers with prepaid schemes that offer a lifetime of validity.

Should you bite? The answer to that will depend on what you want from your mobile phone.

What is lifetime validity?

Lifetime validity essentially means you pay a certain amount -- between Rs 950 and Rs 999 at the moment -- for a prepaid card and you get a mobile connection for life with free incoming calls.

The one-time fee of Rs 900+ includes a small amount of talk time (between Rs 25 and Rs 100). The rest of the fee is the processing cost.

The lifetime validity offer is ideal if you use your mobile phone only to receive calls and don't make too many calls -- or any calls at all.

What's the catch?

The biggest catch is the cost of outgoing calls. Except MTNL's Trump, most operators charge a flat fee of Rs 1.99 per minute for outgoing calls on lifetime validity offers, regardless of whether the call is made to a mobile phone number of the same operator, a mobile phone of a different operator or a landline.

On non-lifetime validity schemes, mobile phone operators offer differential pricing based on who or what number you call. For instance, a call within the operator network could be as cheap as 50 paise per minute.

You can also reduce the cost of your outgoing calls in non-lifetime validity schemes by combining them with other special schemes. For example, Airtel-to-Airtel calls in some schemes cost Re 1 during peak hours, and 25 paise during non-peak hours in certain regions. Hutch subscribers can opt for a scheme that enables them to make calls to other mobile phones at just 99 paise by paying a monthly rental of Rs 25 a month.

You cannot combine these special offers with lifetime validity schemes.

Another downside is that you remain locked into the scheme. If you want to discontinue the connection after, say, three or six months, you will have to forfeit the one-time fee that you paid.

On the plus side, unlike prepaid cards, you don't have to recharge every now and then to keep your connection active. What's more, when you recharge a lifetime validity card, you get full talk time (less taxes).

In contrast, when you recharge or refill other prepaid cards, you have to shell out between 30 to 50 per cent as processing fees. For example, on an Airtel prepaid card of Rs 60, you pay a processing fee of Rs 30 and a service charge of Rs 5.6, which means you get only calls worth Rs 24.4.

Choose wisely

As we said earlier, most lifetime validity schemes are ideal for people who do not make outgoing calls or send many SMSes. It's best for those who are at the receiving end; for the listeners, not the talkers.

If you want both lifetime validity as well as competitive outgoing call rates, schemes offered by MTNL and Reliance appear to be the best bets.

But here's one last point you must keep in mind. Mobile operators get a 20-year licence from the Telecom Regulatory Authority of India (TRAI).

What happens when the licence period expires?

Will the lifetime scheme be carried forward once the licence is renewed?

Is it really valid for a lifetime?

The TRAI is looking into these issues and is expected to come up with guidelines for such schemes soon. How these schemes will be affected by the guidelines, and what will happen to customers who have already locked into the schemes, only the TRAI and time can tell.

Till then, choose wisely.

To see a sample of what some operators are offering, read Current Prepaid Offers.