The country’s largest telecom operator on Friday announced a special 4G data pack for prepaid customers offering “free” data for 90 days. “While the pack is available for Rs 1,495 for existing users; new users can avail this offer via first recharge of Rs 1,494,” it said in a statement.
“This is an attempt to ring-fence the company’s high ARPU (average revenue per user) customers,” an industry expert said on condition of anonymity.
According to industry sources, while all data will be free for 90 days, a user will get 4G speeds for up to 30 GB of data. Thereafter, speeds will fall to almost 2G in tandem with the company’s fair usage policy. This would mean Rs 50 for 1 GB of 4G data. Voice tariffs will continue to be as applicable.
The move comes in response to Jio’s introductory offer of free voice and data till December 31 after which it will not charge its users for voice services and data will be priced as low as Rs 50.
It remains to be seen how other incumbents —Idea and Vodafone —respond to Airtel’s offer as 4G airwave holdings of these operators in terms of circles are less than half those of Airtel and Jio. Email queries sent to Idea and Vodafone on their reaction to Airtel’s announcement remained unanswered as of press time.
Analysts said these companies will have to find other innovative plans to match Airtel and Jio’s aggressive data tariffs. “Operators who don’t have 4G capacity but have 2G and 3G will have to find innovative solutions to match new data tariffs in the market,” said Prashant Singhal, global telecommunications leader.
Airtel’s new plan comes less than a week after its chairman Sunil Bharti Mittal in an interview told ET that the company was ready with its new plans. Despite slashing data prices even before Jio’s launch, Mittal said the company had not yet gone to the bare bones in its tariff offers. He had said the game of matching up to Jio in 4G could be played quickly since the company had the network and capacity to do so.
However, some industry experts said Jio could continue to mount pricing attacks on incumbents. “In an industry where history has shown operators have negligible pricing power, pricing is likely to be determined by the owner of largest capacity, i.e., Jio,” Sunil Tirumalai of brokerage Credit Suisse said in an internal company note. “It is clear that at price points optimal for Jio, incumbents’ networks will get flooded.”
Ajai Puri, operations director for India & South Asia at Bharti Airtel, said the new pack will allow customers using high-speed 4G handsets “stay online round the clock without having to worry about exhausting data limits or going for frequent recharges.”