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Airtel cuts 4G data prices: Thank You Reliance Jio!

BHARTI-airtel-4gBharti Airtel chose a Sunday to make one of the most important announcements by the company from both its earnings and customer perspecitve — a deep slashing of its data prices.

The move is seen as a precursor to the changes that will take place after Aug 15, the day when Reliance Jio is expected to announce its a blockbuster ‘Freedom Offer’ similar to ‘Monsoon Hungama’.

CHEAPER 4G DATA

For someone willing to spend Rs 750 a month, the price of 1 GB of data has fallen from around Rs 190 to Rs 125, a decline of 35%.

This is the biggest price cut announced by Bharti Airtel since it began offering high-speed data services five years ago.

Other packs for which the price cut has come into effect are Rs 450, where data price has gone from around Rs 225 per GB to Rs 150 and the 1000 pack, under which you will now pay Rs 100 per GB instead of Rs 153.


UPDATE: Idea has also cut its prices to bring it in line with Airtel’s new tariff


These price cuts have come in a situation where big telecom companies have been telling the regulator that they may need to increase data prices to Rs 1,000-2,500 per GB if net neutrality norms are not eased.

BHARTI AIRTEL’S NEW 4G TARIFF

TypeMRP Current Data BenefitNew Data BenefitValidity% Increase
4G/3G4552 GB3 GB28 days50%
4G/3G6553 GB5GB28 days67%
4G/3G7554 GB6GB28 days50%
4G/3G8555 GB7 GB28 days40%
4G/3G9896.5 GB10 GB28 days54%

With the cuts, Bharti Airtel is now the second cheapest 4G operator in India after Reliance Jio, which offers a handset and 3 months of unlimited data and calls for Rs 2,999.

With the same amount, you can now get 30 GB of 4G data from Bharti Airtel under the new scheme.

The move is expected to lead to similar cuts by Idea Cellular and Vodafone, which charge around 40% more. Idea, for example, charges Rs 1,350 for 10 GB, while Vodafone charges around Rs 1,500.

India is home to among the world’s highest data tariffs when seen in the context of average incomes.

ALL THANKS TO RELIANCE  JIO

The credit for the latest price cut must go to Mukesh Ambani-owned Reliance Jio, which — for the first time in India — is offering three months of unlimited network usage for as little as Rs 2,999, while giving a handset free.

Jio was widely expected to shake up the Indian wireless market due to its humongous scale and disruptive pricing.

It is expected that the company will offer 10 GB of data for around Rs 500, and its 1 GB pack will be priced around Rs 80.

Reliance Jio is expected to reach 2 mln users by the end of this month, and 2.5 mln by Aug 15.

At an average of 30 GB per month per user, Jio will carry a total of 75 mln GB of data per month on its rumored launch date of Aug 15.

In comparison, Bharti Airtel, which has been in telecom for over 20 years, carries only around 50 mln GBs per month, while Vodafone and Idea carry less than 30 mln per month.

Even before its official launch, Jio has started affecting the data traffic of its rivals.

And the launch could spell more trouble for companies like Idea Cellular, which saw its sequential data growth fall to 1.5% from around 15% during the first three months of this year.

It is possible all the big three operators — Bharti Airtel, Vodafone and Idea Cellular — could report flattish data growth next week when the announce their performance numbers for the three months from April to June.

Given its current 4G network, Reliance Jio has enough capacity to carry twice as much data as is being carried today by all other wireless operators in India today, and could bleed its rivals by undercutting their prices by a big margin.

Idea and Airtel have seen their stocks correct sharply in recent months as the launch of Mukesh Ambani’s dream project nears.
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