‘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

The Economic Times - - Telecom: The Wide Spectrum - Kalyan.Par­bat@ times­group.com

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.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.