Bharti Airtel is set to slash 4G / LTE data charges by 31 percent. The move is aimed at taking on Reliance Jio Infocomm’s 4G network that will hit India early next year.
The reduction in 4G prices will be a big boost for existing subscribers as the country’s largest telecom operator and the only 4G service provider seeks to increase subscriber base from less than 50,000 currently.
In 3G market as well, Airtel is behind market leader Reliance Communications.
Recently, Airtel announced around 90 percent reduction in 2G data tariff in Haryana and Punjab circles.
Airtel is cutting 4G tariffs at a time when there is a speculation that the mobile operator is going slow on its LTE expansion in India. At present, Airtel’s 4G on TD-LTE technology is available in Kolkata, Bangalore, Pune and Chandigarh circles.
Lack of availability of cost effective dongles and handsets, which are compatible for 4G, has put pressure on the growth of 4G subscribers in the country.
Though the 2010 auction has attracted several telecom players to invest in 4G spectrum, companies such as Aircel, Reliance Jio Infocomm, Tikona, etc. stayed away from rolling out due to lack of strong business model for a country like India.
Market research agency ABI Research recently said that TD-LTE, the technology used by China Mobile, Airtel, Reliance Jio Infocomm for 4G, will reach 52 percent of population coverage by 2018.
On the other hand, FD-LTE, the technology used by several global mobile operators including Verizon, AT&T, etc. will cover 57 percent population during the same period.
ABI Research says FDD networks will expand at CAGR of 33 percent between 2012 and 2018 TDD networks will gain ground at a more rapid rate of 43 percent during this period but will only reach 52 percent population coverage due to fewer licensed markets currently. Slightly more than half of the contracts concluded are related to LTE-FDD.
Though 3G is a complimentary service to 4G, both will compete in the Indian telecom market. Analysys Mason recently said 3G SIMs are expected to grow from 35 million in 2012 to about 272 million by 2017 as more and more high-end 2G users upgrade their services.
Analysys Mason says the growth will be driven by wider network coverage, better affordability of 3G services and increasing affordability of 3G capable devices. The current data usage on 3G will almost double from 475MB/sub/month in 2012 to 890MB/sub/month by 2017.
Though Airtel is slashing the 4G tariffs, the growth will not be significant as Airtel does not have a strong 4G user base. Also, cost effective 4G phones and dongles are yet to land in India.
“Airtel will offer 4G speeds at 3G price-points to make fourth generation wireless broadband services more affordable and stiffen the challenge for new competition,” an Airtel executive told Economic Times.
Bharti Airtel, which will face competition from Mukesh Ambani’s Reliance Jio Infocomm next year, will be forced to improve quality of service and better tariffs.
The ET report says Airtel will lower its base 4G data plan from Rs 650 to Rs 450 to offer more value to customers in Kolkata, Bangalore, Pune and Chandigarh.
Under the revised data tariff plan, entry-level customers will be allowed 2GB, 3GB and 4GB of free data usage at faster 4G speeds at 3G data charges of Rs 450, Rs 650 and Rs 750 a month respectively. But they won’t have access to Bharti’s 4G entertainment library services, which will be reserved for customers on higher data plans, from Rs 999 and above.
Airtel customers on these higher-end 4G plans will have free access to a digital library of 1,000-odd movies and 100 games evolved in partnership with BigFlix and Indiagames, said another company executive who did not wish to be named.
At the highest end, Airtel 4G customers on Rs 2,999 and Rs 4,799 data plans will be offered bigger free usage limits of 45 GB and 80 GB compared with the earlier levels of 30 GB and 50 GB respectively.
