Reliance Jio arrived in India as a disruptive player, bringing free voice calls, data, scrapping roaming charges, etc. Along with flaunting its cheap offers, Jio has been sinisterly targeting users of its rival operators. This, in turn, has compelled other telecom firms to focus on high-paying customers.
Telecom operators’ effort to battle with Jio
Recently, responding to Jio’s launch of Prime subscription, under which the firm aims to retain its 100 million user base after its free services end on 31 March, Bharti Airtel introduced a Rs 145 and Rs 349 plan. The cheaper plan offers 14 GB data per month with a 500MB cap per day and unlimited calls to Airtel numbers. The Rs 349 plan has unlimited calls to all networks. Vodafone India is now offering 15 GB of data for the first three months at the same price and 6 GB thereafter.
Reportedly, a person aware of Airtel’s plans said these plans are meant for customers who reach out to them proactively to move out of the network.
However aggressive the pricing war may be, it is the necessity of the hour, essentially as the telecom industry has lost about 20% of revenue due to Reliance Jio’s free services.
During Bharti Airtel’s earnings call with investors for the quarter ended 31 December, chief executive officer Gopal Vittal said the challenge for the firm, which has a stratified average revenue per user (Arpu) table across the market with different customers at different levels of Arpu, is that there could be some users who will move to a cheaper plan.
“But that is, unfortunately, the competitive dynamic that we are living in today, and that is something that we believe makes a lot of sense for us because that will drive more high-Arpu customers into our network,” Vittal had said.
“In the context of playing an Arpu game, we believe that bundled packs make a lot of sense to lock in Arpu, deliver value,” he added.
Airtel is, in fact, is urging its sales partners to push these plans to customers and its channel partners are being given special commissions on these plans—double the 2.5-3% that they get on other plans.
According to a 27 February report by Credit Suisse, Airtel’s plans are not openly marketed but targeted at higher-Arpu customers through the Airtel app, or the plans are disclosed when one walks into a store for cash recharge.
“Even subscribers with more than Rs600 monthly spend (like some of our team members) are getting these offers as of now (particularly if these subscribers have shown a drop in spend recently),” Credit Suisse said in the report.
Airtel, Vodafone, Idea Vs Reliance Jio
Airtel – After Jio abolished roaming charges for both voice and data services, Airtel followed suit. As of now, it provides 30GB of 4G data at Rs 1,495 for a period of three months. If you do not have an Airtel connection and wish to shift to its 4G service, by paying Rs 9,000 for 12 months. Additionally, there is an option of 3GB data at a price of Rs 345. The pack offers free calls to any network in the country and 4GB data (1GB regular pack benefit and 3GB free data). For postpaid users, you can get free 3 GB data per month with all MyPlan Infinity Plans. The Rs 549 Infinity plan will be offering unlimited calling and also 6GB data per month including the 3GB free data plan.
Vodafone had already slashed rates since Reliance Jio’s entry. According to a Mobile Analyst, Vodafone India has launched new tariff plan of Rs 346 to counter Reliance Jio that will offer 1 GB 3G/4G data daily with unlimited free calls.
In October 2016, Vodafone India had made incoming calls while on roaming free. It is offering 6 GB data per month for Rs 349, along with unlimited voice calls. In another new offer, any user who buys the 1GB data pack for Rs 250, will now get 4 GB data with a validity of 28 days. Additionally, Vodafone will also give 22GB of data when you recharge your number with Rs 999. For that price, earlier customers could get only 10GB of 4G data. This new offer can be availed in all regions where the company offers its 4G services. The data pack which offers four times the usual value can be availed through online media and also local retailer recharges. The other offers by Vodafone are Rs 350 for 6 GB data, Rs 450 for 9 GB data, Rs 15,00 for 35 GB data.
Idea Cellular – Among the major telecom companies in the country, Idea Cellular is the only one which imposes roaming charges for incoming calls. An Idea customer pays Rs 0.45 per minute for an incoming voice calls. For outgoing calls, the charges are 0.80 per minute. Idea is offering 1 GB data per month for Rs 348, along with unlimited calling feature. If you recharge with this pack on a new 4G-enabled handset, you will get additional 3 GB data. The validity for the pack is 28 days and can be availed for a maximum of 13 recharges in 365 days. There is a Rs 499 rental plan for postpaid subscribers too, which will give users unlimited local, national and incoming roaming calls with 3 GB free data.
Jio Prime offers: Reliance Jio officially revealed its Jio Prime membership plans on Wednesday.
Here’s a look at the new postpaid and prepaid tariffs for Jio Prime members:
Rs 19 plan: Prime members get access to 200 MB 4G data apart from free voice, SMS and Jio apps subscription. Non-Prime members- offers 100MB 4G data. Validity – One day.
Rs 49 plan: It offers 600 MB 4G data to Prime members; Non-Prime member- 300 MB. Validity – three days.
Rs 96 plan: Offers unlimited data, 7GB data available at 4G speed and FUP is 1GB per day for Prime members. Non-Prime members: Same thing, except the FUP, is 0.6GB per day. FUP is basically a cap on bandwidth, known as Fair Use Policy. Validity: 7 days.
Rs 149 plan: Prime Members- 2 GB data, all at 4G speed. 100 SMSes. Non-Prime members- 1GB. Validity 28 days.
Rs 303 plan: Prime members- get unlimited data, while 28GB available at 4G speeds. FUP in this is 1GB per day. Non-Prime members- get 2.5 GB data with no FUP. Validity – 28 days.
Rs 499 plan: Jio gives access to unlimited data, where 56 GB can be used at 4G speeds. FUP is 2 GB per day. Non-Prime members get 5GB data with no FUP. Validity – 28 days.
Rs 999 plan: Jio prime users get unlimited data, where 60 GB is available at 4G speeds, validity- 60 days. Non-Prime members get total 12.5 GB data, validity 30 days.
Rs 1999 plan: Prime members get unlimited data, where 125 GB is available at 4G speeds, Validity – 90 days. Non-Prime members get access to 30 GB data, validity- 30 days. No FUP.
Rs 4999 plan: Prime members get unlimited data, where 350 GB is available at 4G speeds; validity-180 days. Non-Prime members get access to a total of 100 GB data, validity- 30 days. No FUP.
Rs 9999 plan: For prime members, Jio offers unlimited data, where 750 GB is available at 4G speeds, validity- 360 days. Non-Prime members get access to a total of 200 GB data, valid for 30 days.
Rs 303 plan: For prime members – Unlimited data, where 28 GB is available at 4G speeds. FUP is 1GB per day. Non-Prime members get 2.5 GB data.
Rs 499 plan: Prime members- Unlimited data, where 56 GB is available at 4G speeds. FUP is 2 GB per day. Non-Prime members: 5 GB data without FUP. Validity- till bill cycle expires.
Rs 999 plan: Unlimited data, where 60 GB is available at 4G speeds for prime members. Non-Prime members: 12.5 GB data without FUP. Validity- till bill cycle expires.
Motilal Oswal Group however, welcomed RJio’s ARPU-accretive price plan for the market. According to Motilal, with the top two operators accounting for 75% of the market, the big opportunity in the market can be tapped in two ways:
1) 80% of the subscribers are not consuming wireless broadband, which could be a big opportunity for the larger players to improve ARPU by offering higher data to subscribers who consume low or no data. This trajectory should lead to a recovery in the market by 3QFY18.
2) 25% of the subscribers are with weak-footed operators having limited data coverage and no ability to match the large players’ pricing. To attract these vulnerable subscribers, the larger companies may not need to adopt ARPU-detrimental pricing strategy. All this may logically consolidate the market in favour of the top three players.