HOME > BUSINESS > With tariff change, Idea Cellular 4G data now cheaper than Reliance Jio

With tariff change, Idea Cellular 4G data now cheaper than Reliance Jio

Idea 4G tariff plan

With Reliance Jio raising the price of its 1GB-per-day pack from Rs 309 to Rs 399, Idea Cellular has managed to beat the new operator in this segment, though not by much.

Idea Cellular offers 1GB/day for 84 days at Rs 397, making it cheaper by 2 rupees. Though Idea’s scheme is not listed on its website, it is available to almost all 4G users on their selfcare app.

In other words, both Jio and Idea now offer 1 GB/day at about Rs 143 per month.

That pricing is also comparable to a similar plan from Bharti Airtel that provides 1 GB per day for Rs 150 per month, but without the free call facility.

END OF DOG DAYS?

Though the impact of the tariff plan may not be much, it does mark a milestone — an achievement of parity — in the battle between the incumbents and the challenger.

Since it began operations nearly a year ago, Jio had been unassailable in terms of pricing.

The company’s offerings were priced at half, or even a third, of what comparable plans cost on rival networks.

However, the Mukesh Ambani-led company has to make money too, and to this end, it has set in motion a slow and gradual chain of events to get its users to pay more for voice and data.

For example, for the last three months, they were getting 1 GB per day and unlimited voice for about Rs 100 per month. But, starting from July 15, they will get it at about Rs 150 per month.

The company’s aim is to eventually raise it to Rs 300 per month.

How long it will take to achieve this target will depend on the impact of the current price change from Rs 100 to Rs 150.

If it finds a lot of abandonment — people simply refusing to recharge when the price is increased — it will introduce its next price increase later, perhaps towards the end of 2017.

If, on the other hand, abandonment rates are low, it would take a step towards increasing the price to 200 or 250 in October, potentially reaching the 300 mark by January.

At 300 rupees per month, the incumbents can — with some difficulty — compete with Jio, at least as far as data is concerned.

VOICING PAIN

However, this hardly means that the pain is getting over for the incumbents. In fact, the real pain may be only just beginning.

That’s because of the possibility of the Ambani firm taking aim at the incumbents’ cash cow — voice services.

Jio provides unlimited voice calls for Rs 150 per month, while the incumbents offer unlimited voice calls at Rs 350 per month.

Yet, the newcomer has not been able to disrupt the voice market as radically as it has been able to impact the data market. Data prices have fallen by nearly 50% since Jio launched, but voice prices have fallen only by around 20%.

Idea’s voice pricing, for example, fell to 26 paise last quarter from about 33 paise a year earlier. In contrast, its data price fell by half to 11.5 paise per MB from about 23 paise in the same period.

Because of the resilience exhibited by voice prices, the incumbents have not yet faced the full impact of the new entrant on their voice business that contributes about 80% of their profit.

This has been because of three reasons — all related to the quality of hardware available in the market.

First is device price. Jio’s voice works only on higher-end phones with 4G VoLTE, and these cost at least Rs 3,500. Many people are unwilling or unable to make a one-time investment of Rs 3,500 to save Rs 100 or 150 per month on voice bills.

The second factor is ease of use. Many — especially those above 40 — do not like to operate touch-screen devices. They prefer the simplicity of a bar phone, and are confused by the smartphone.

The third factor is sturdiness. Full-touch devices are fragile, and are often destroyed at a single fall. This keeps many customers — especially those that do not use much data — from going for a smartphone.

All these three factors are expected to be addressed by Jio with its upcoming feature-phone.

With a reported price tag of Rs 999, the device will address all the barriers that have so far been holding back more widespread adoption of the company’s voice services.

If, as a result, the incumbents are forced to cut their voice tariffs by another 35%, it would seriously impact their ability to remain profitable concerns.

Follow ULTRA.news
Tata DoCoMo users get Airtel network, but not the tariff plans yet Bharti Airtel and Tata Teleservices said they have started moving customers of Tata DoCoMo to the Bharti Airtel network using what is called an 'intra-circle roaming' or ICR agreement.This essentially means that Tata Teleservices will continue to operate a network in a techn...
Reliance Jio arrests trend of declining net additions; user activity increases Reliance Jio, India's newest operator, added 5.94 mln subscribers in September, breaking a declining trend in net additions and taking the total subscriber number to 138.62 mln (13.86 cr).Even as the company increased its subscriber numbers, it was also able to reduce the p...
Vodafone increases data on 349 plan to 1.5 GB per day Following Idea Cellular and Bharti Airtel, Vodafone too has increased the data allocation on its Rs 349 plan to 1.5 GB per day from 1 GB per day.Over the last few days, Bharti Airtel and Idea Cellular too had increased quota by 50% to cope with competition from Reliance Jio....
After Reliance Jio, Idea offers 100% cashback on Rs 357 plan Idea Cellular, reportedly India's third largest 4G operator by volume, has started offering a 100% cash-back scheme even as the Cellular Operators Association has complained against such schemes.Similar cash back schemes have been announced by Reliance Jio in an effort to ma...
As Jio reality sinks, Idea abandons ‘limited aggression’ strategy Idea Cellular has abandoned its earlier strategy of 'limited aggression' in dealing with the threat from Reliance Jio and Bharti Airtel, and will be more visible in its counter strikes from now, said CEO Himanshu Kapania."From end October, Idea has shifted its earlier stand ...
Idea sees half of India remain 2G-only in 2022, to refarm 900 MHz for 4G About 600-650 mln telecom customers in India will remain 'pure 2G' users even in the year 2022, while 4G users would swell from 175 mln to 750 mln, said Himanshu Kapania, CEO of India's fourth largest telecom operator Idea Cellular.At present, India has around 1.05 bln activ...
Bharti Airtel raises Rs 3,325 cr by selling shares in Infratel Bharti Airtel said it raised Rs 3,325 crore (USD 510 Million) by selling shares in its tower subsidiary.It sold 83 mln shares at Rs 400.60 each. The price was at a discount of 3.6% to the previous day’s closing level.Shares of Infratel opened down by about 4% today due ...
Tata Teleservices loses 7.3% subscribers in October in Maharashtra Tata Teleservices, the mobile telecom arm of the Tata Group that was sold to Bharti Airtel last month, lost about 7.3% of its nearly 7 mln mobile subscribers in Maharashtra and Goa, according to a regulatory filing by the company.Tata Telservices Maharashtra Ltd, as the compa...
Idea, Vodafone to share 4G network; Broadband towers overtake 2G Idea Cellular and Vodafone in India started sharing their some of their networks in October, and will soon increase their 4G coverage by about 5,000 villages due to this, the Aditya Birla Group company said.Idea Q2 vs Q1"In October 2017, Idea and Vodafone India have ente...
Idea Cellular loss widens, ARPU down, VoLTE in early 2018 Idea Cellular reported a 19.7% year-on-year decline in its standalone revenue for the second quarter of this financial year, while net loss increased to Rs 1,176 cr from 617 cr in the preceding quarter and a net profit of 4.3 cr in the year-ago period.The revenue per subscri...
American Tower Corp buys towers of Idea and Vodafone in India for $1.2 bln Vodafone India and IdeaCellular Ltd said they agreed to sell their standalone tower businesses in India to the local unit of American Tower Corp for an aggregate enterprise value of Rs 7,850 cr (US $1.2 billion).In case the sale is completed before the merger of Vodafone Ind...
Bharti Airtel unveils new postpaid plan 499 with 20 GB data Bharti Airtel said it had introduced new 4G plans for its postpaid, or contract, customers, bringing some of the benefits that were hitherto available only to the prepaid segment.The new plan has been priced at Rs 499 plan for the postpaid segment.However, compared to pr...
Airtel Broadband users get to ‘carry over’ unused data to next cycle Bharti Airtel said its home broadband users will get to carry over all unused data benefit to the next billing cycle up to a limit of 1,000 GB."This is a first of its kind innovation in the fixed home broadband segment in India. The 'Data Rollower facility will ensure that Ai...
4G prices to stay low for a year – Airtel unveils cheap 1-yr plan If there are people who expect data prices to rise substantially in the next one year, they are probably not working at Bharti Airtel.India's biggest telecom firm by revenue has unveiled long-term recharges that allow users to lock in the current cheap prices for up to a yea...
Reliance Industries to raise Rs 5,000 cr next week via listed debentures Reliance Industries said it would raise Rs 5,000 cr from the debt market by issuing debentures on Wednesday, November 8.Jio has taken the market by stormThe debentures issued will not be convertible to equity shares and will be sold privately (private placement) without ...
Hathway Broadband starts FTTH, data use up 26% in 3 months Hathway Digital said it has started rolling out fiber-to-the-home services in congested areas, and also reported a strong increase in data use after slashing prices and increase quotas.For the three months ended September, an average consumer on Hathway Broadband increased h...
Post Bharti Airtel deal, Tata DoCoMo reaches out to worried subscribers Photo by Adithya VikramTata DoCoMo has started reaching out to customers to prevent them from leaving the network in droves, ahead of a takeover of the mobile operations by Bharti Airtel.Subscribers of Tata DoCoMo, a brand operated by Tata Teleservices, had started porti...
Bharti Airtel ARPU falls below Jio’s; but data usage zooms Bharti Airtel, India's largest telecom company by revenue, reported further erosion in its revenue and profit in September quarter compared to the previous June quarter.The company reported revenue of 21,777 cr, down 12.3% compared to a year ago and down 0.8% compared to the...
Bharti Airtel Q2 profit margin up, but ARPU falls Bharti Airtel, India's largest telecom company by revenue, reported further erosion in its revenue and profit in September quarter compared to the previous June quarter.The company reported revenue of 21,777 cr, down 12.3% compared to a year ago and down 0.8% compared to t...
BSNL to increase broadband speed to 10 Mbps from tomorrow Bharat Sanchar Nigam Ltd has increased the speed of all its broadband to 10 Mbps from 2-4 Mbps from tomorrow for all plans starting from Rs 675 per month.This price and data allocation of the plans will remain unchanged, it said.For plans below Rs 675 per month, the down...