The latest tariff announcements made by Reliance Jio and Vodafone India indicate that the Indian telecom service industry is heading for another round of financial turbulence.
The revised rate in cellular tariffs for wireless subscribers in India reflects the need among telecom operators to grab fresh opportunities from the shut-down of 2G and 3G telecom service by Reliance Communications and closure of telecom operations in six circles by Aircel.
Reliance Jio, a 4G operator owned by billionaire Mukesh Ambani’s Reliance Industries (RIL), was the first to announce the new pricing for its cellular services. Reliance Jio needs more active users across to improve its ARPU and financial growth.
The recent TRAI data shows that Reliance Jio’s 82 percent mobile subscribers are active on their 4G network as compared with 94 percent active subscribers with Vodafone, 98 percent with Airtel and 102 percent with Idea Cellular.
Interestingly, Bharti Airtel, which is struggling to compete with Reliance Jio in the Indian 4G space, is yet to make any competing offer to grow its subscriber base. Idea Cellular, which will be combining its telecom business with Vodafone India, is also maintaining silence this time.
9.6 million subscribers have submitted their requests for Mobile Number Portability (MNP) in the month of October, 2017 – indicating that existing special promotional packages from Reliance Jio, Aircel, Idea Cellular and Vodafone did not make much impact on subscribers.
The power to attract subscribers of both Reliance Communications and Aircel will enable Indian mobile operators to spruce up their already existing presence in rural India. The disadvantage with such customer acquisition is the low ARPU.
Reliance Jio said its 199 plan provides unlimited voice, unlimited SMS and 1.2 GB 4G data per day, in addition to subscription to Jio Apps for all Jio prime members for 28 days.
Reliance Jio’s 299 plan offers free voice, 2 GB 4G data per day, unlimited SMS and access to Jio Apps for all Jio prime members for 28 days.
Vodafone India said its Rs 198 plan offers unlimited local and STD voice calls, 1GB data per day and 100 free SMS per day for 28 days across all its 4G circles. New customers can recharge with Rs 229 and enjoy the same benefits on Vodafone’s SuperNet 4G network.
The presence of the financially strong Reliance Jio Infocomm is giving new opportunities for established telecom operator to re-invent their telecom business and grow further in India. The survival of big three: Airtel, Idea and Vodafone will depend on the marketing power or weakness of Reliance Jio.