India’s one billion plus mobile phone users will be eager to go for 4G Internet and smartphones as telecom data tariff touched record low level for the time being.
The 1 GB data plan per day for a monthly price of Rs 149 or USD2.4 from Reliance Jio, the most disruptive mobile operator in the world, from January 9 did not get any response from rivals. The lack of response from telecom rivals indicates that the low data pricing model does not work for them.
The main attraction of Reliance Jio packages are the free calls on VoLTE, free national roaming and free SMS to all subscribers.
In the earlier occasions, Bharti Airtel, BSNL, Idea Cellular and Vodafone India responded with their new mobile data plans.
They are not announcing new wireless data tariffs probably because they could attract customers from Reliance Communications and Aircel which are shutting down completely or partly to save investment.
Airtel, the largest telecom operator in terms of mobile service revenue and subscriber base, is expected to get mobile phone customers from Tata Docomo and Telenor India through the recent acquisitions.
Competing against Reliance Jio, the national operator with 4G only presence, is always difficult for Airtel, BSNL, Idea Cellular and Vodafone because these operators have gaps in their 4G coverage across India.
For instance, 4G coverage of Airtel, BSNL, Idea Cellular and Vodafone in several rural locations and small towns is not adequate and consumers receive 3G or 2G Internet coverage as a supporting data network.
When Reliance Jio introduced 4G services in September 2016 – after investing $20 billion plus in networks and spectrum, the local telecom industry thought success in the Indian telecom market will not be easy for Mukesh Ambani, the richest Indian.
But attracting subscribers from small companies was an easy task for Reliance Jio in the first phase. Mukesh Ambani and team could celebrate the first 100 million – including active and less active – subscribers without troubling big three operators in a big way.
The latest tariff announcement from Reliance Jio is aimed at shaking up Sunil Mittal-promoted Airtel and Kumar Mangalam Birla-promoted Idea Cellular. Mobile ARPU, according to the chart prepared by India Rating, is already showing signs of turbulence in coming months.
Reliance Jio last week surprised CEOs of telecom operators saying the company’s flagship MRP 399 plan will provide 20 percent additional data with enhanced validity of 2 additional weeks, increasing the current validity from 70 to 84 days.
In addition, Jio has also introduced a special 1.5 GB day packs at the lowest per GB industry rate of Rs 4 per GB.
For comparison, T-Mobile, the most disruptive telecom operator in the U.S., offers 10GB of LTE data for $50 per month.
The challenge for all Indian telecom operators will be the lack of smartphone available in the Indian device space. Recently, Airtel and Vodafone announced 4G smartphone deals with Samsung to attract more data customers.