Over the last two days, Bharti Airtel has quietly slashed its 4G pack prices to unprecedented levels in reaction to upcoming plans from Reliance Jio.
According to the new data plans available to anyone who recharges using Airtel’s online or app facility, the price of 10 GB of 4G data pack has been brought down from Rs 999 to Rs 495.
Similarly, the 6 GB plan now costs Rs 260-265 compared to Rs 700 a month ago.
These price changes are applicable
only for 4G handsets and usage, and not for 3G-only customers to all users as long as they are using the SIM on a 4G handset. In other words, if the customer is using a 3G handset, he or she will have to rely on the older, more expensive tariff, but if he or she is using an LTE handset, the new tariff will apply even if the final consumption happens on 3G or 2G networks.
Though Airtel has not made any official announcement in this regard, the new tariff is available to anyone who recharges on the website or app.
The move comes in reaction to similar tariffs from Reliance Jio, which will be selling 6 GB at Rs 300 starting Jan 1. This will be available as a top-up recharge over and above the 1 GB free quota and will be consumed only if and when the 1GB is exhausted.
Besides the above, India’s largest telecom company has started giving free data and voice services to its key customers.
For example, a key customer got the above offers (given in the chart). The plans include free 6 GB of data when recharging with Rs 260 of talktime and unlimited local, STD and roaming calls and 6 GB of data for just Rs 299. Something like this would have cost Rs 1,500 per month from the provider just three months ago.
Moreover, these are prices that not even Reliance Jio matches. For example, Jio gives unlimited calls and only 4GB of data for Rs 499 — thus making the Airtel plan 50% cheaper.
The freebie plans are listed in the ‘only for you’ section of the mobile app or web portal, and are not available to everyone.
The kind of plans that India’s biggest telecom company is offering to retain its key customers is unprecedented and unexpected.
While some amount of tariff tweaking was expected, this level of aggression is likely to take investors by surprise.
Most analysts who track the company were looking for a decline of 10-20% in the tariff charged by Airtel in response to Reliance Jio.
However, going by the above details, the correction seems to be in the order of over 50%.
It remains to be seen how big an impact this will have on both Bharti’s profitability as well as its efforts to prevent customer loss to the new entrant.
It also remains to be seen if and when Idea Cellular and Vodafone respond to the above packs. Tata DoCoMo has already started offering 10 GB at Rs 495 in select circles.
While Idea does offer some freebies, such as an extra 9 GB to anyone who buys 1GB pack (see above), it has remained far more restrained compared to Bharti in its response to Jio so far.
All this, in other words, suggests that the new ‘normal pricing’ for data in India is going to be around the Rs 50 per GB mark, down from Rs 220 per GB three months ago.