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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 year.

Airtel’s new 1-year mega pack — which offers unlimited voice calling, text and 300 GB of unrestricted data — has been priced at Rs 3,999.

Even if one assumes that voice calls are truly free and the entire Rs 4,000 is for data, the price comes to Rs 13.33 per GB only.

In fact, Airtel’s plan is cheaper than a similar offer from Reliance Jio. The Mukesh Ambani-led firm gives 350 GB for Rs 4,999, or Rs 14.29 per GB.

Unlike most other offers in the market, these yearly packs do not place any restriction on how much data can be consumed per day.

At present, a plan with 1 GB free per day costs about Rs 150.

However, given that data lapses at the end of the day, and cannot be carried over, an average consumer is able to use only about 7.5 GB per month on such a plan.

In other words, on average, he or she ends up paying Rs 20 per GB, which is higher than the Rs 13.33 per GB offered by the yearly plan (assuming voice is a free add-on).

NO CHANGE SOON?

Airtel’s move to offer year-long plans are an indication that the company doesn’t see a huge improvement in the market price for data going forward.

This is a different stand than what is taken by many investors in telecom stocks.

“We expect Jio to raise tariffs every few months, with the next potential increase in January 2018,” Goldman Sachs, which advises investors around the world, said two weeks ago.

It said it expects Jio to raise the monthly cost of the 1 GB per day plan — currently at Rs 150 — to more than Rs 300 per month over the next one year.

At Rs 300 per month and an average consumption of 7.5 GB per month, the 1 GB/day plan translates to a tariff of Rs 40 per GB.

So far, only Reliance Jio was offering long-term plans of up to one year, and Airtel joining the platform indicates an converging consensus that future data prices will remain a fraction of what they were a year ago and that voice has indeed become ‘free’.

However, the third big player in the market, Idea Cellular-Vodafone, is yet to announce such long-term plans.

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