‘Airtel Rolls Out 2 Aggressive Plans to Take on Jio Prime’
Telco to offer 14 GB of 3G/4G data, unlimited voice calls for over a month: Credit Suisse
Kolkata: Reliance Jio Infocomm’s newly unveiled ‘ Prime’ offer — about 30 GB of data and unlimited voice calls for .₹ 303 a month starting April 1 — has stoked a veritable price war in the telecom sector for retaining uppertier customers, possibly leading to a serious compression in revenue for rival carriers, analysts and industry experts said.
Market leader Bharti Airtel is learnt to have introduced two super aggressive bundled plans at .₹ 145 and .₹ 349, both offering a generous 14 GB of 3G/4G data over a month, sweetened with unlimited voice calls, according to a Credit Suisse note seen by ET.
The .₹ 145 pack, it said, offers unlimited “on-net calls” while the higher .₹ 349 variant offers unlimited voice calls to all networks, the brokerage said in a note to clients. There is a 0.5 GB a day cap on data usage.
Bharti Airtel did not reply to ET’s queries about the new bundled tariff plans.
Credit Suisse said Airtel’s latest plans offer as much as 7080% discounts to existing customers who use similar amount of data. For instance, just a month back, a bundled plan with 16 GB data and unlimited voice calls cost as much as .₹ 1,199.
According to the Swiss brokerage, the advent of aggressive counter offers from Airtel even “before the Jio Prime ads hit the billboard”, signal “tit-for-tat aggression” from the Sunil Mittalled telco, in a departure from its “historical passive response to competition”.
All efforts, the brokerage said, appear to be to make sure these catch the eye of customers with high ARPU (average revenue per user). The company is offering higher commissions to retailers to push these plans, it said.
Credit Suisse predicted a large number of Airtel’s high-ARPU customers to adopt the plans, even as it warned of “pressure on ARPUs, revenues, margins and capex”.
Number 2 carrier Vodafone India and the third-largest, Idea Cellular, didn’t respond until press time on Monday to emails asking whether they would match Airtel’s new rates.
A senior industry executive bemoaned the trend, saying such tariff cuts could possibly result in a 12-fold jump in average data consumption levels per user which, in turn, could undermine the overall network experience for data customers as current network capacity may be ill-equipped to take on such an unprecedented surge in consumption levels.
“We are, typically, looking at average monthly data consumption levels per user zooming up from the around 900 MB level now to at least 10 GBs if these plans see replication and rapid adoption, which are likely as upper-end customers will be paying way below what they currently pay”, said the official cited above.
Another industry executive said efforts to match Jio’s tariffs could gradually knock off 40 to 50% of the revenue that telecom operators like Airtel, Vodafone and Idea generate from upper-tier customers. This would eat into their overall ARPU and hurt both revenue and earnings in the coming quarters, the executive added.