Mobile data prices down 96% under Modi

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Data Prices have crashed by 96% and voice prices by 76% in four years

Prices of mobile data have crashed by 96% under Modi’s tenure, while those of voice services fell by 76%, according to data released by Department of Telecom.

On average, 1 GB of mobile data used to cost Rs 254.95 in December 2014, DoT said, while its price has fallen to just Rs 10.91 for the three months ended September 2108.

Over the same period, voice prices crashed to 12 paise per minute from 51 paise per minute, DoT added.

The numbers were calculated by dividing the total data charges collected by all telecom operators by the total number of GBs sold during the period. A similar calculation was made to obtain average voice prices during the two periods as well.

While the decline may have coincided with the prime ministerial tenure of Narendra Modi, it most owes to another Gujarati — Mukesh Ambani, who opened his 4G wireless services to the public in 2015 under a limited trial.

The 4G service started by Ambani caused massive disruption in the Indian wireless market, which was till then dominated by the likes of Bharti Airtel, Idea Cellular and Vodafone.

Unlike Reliance Jio, incumbent operators always took care not to disrupt each other when deciding their prices, and always pitched their offerings along similar lines to prevent any untoward declines in voice and data prices.

With data prices hardly staying the same for several years even as technology grew by leaps and bounds, the Indian telecom scene was ripe for a major disruption in 2015.

Mukesh Ambani seized the opportunity and crashed the prices by using modern technology that allowed him to offer voice and data prices for a fraction of the prices demanded by incumbent operators, whose technology was one, or even two, generations behind.

Despite attempts to imitate Ambani’s strategy, the incumbents are still nowhere near Reliance Jio in terms of volume market share in the Indian wireless voice and data market.

It is estimated that at one time, Jio was carrying about 75% of India’s total wireless data. At present, its share is estimated to be around 50%.

SMART TACTICS

Reliance Jio owes much of its success to its strategy of outwitting its rivals. The operator successfully lulled its competitors into a false sense of complacency by giving the impression that its tariff plans were short-term in nature and it would revert to more ‘normal’ tariffs later.

This led rivals like Idea Cellular and Bharti Airtel to adopt a ‘wait and watch’ policy for more than a year instead of cutting prices, allowing Jio to spread its tentacles deep into their customer base.

These rival operators have since wisened up to what is going on and have, in recent quarters, unveiled tariffs that are more in line with what is available from Jio.

In fact, the cheapest 4G tariff plan in India was unveiled a few days ago by Vodafone Idea, whose Rs 569 plan is at least 15% cheaper than any plan offered by Jio.

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