What New Mobile Network Plans Mean for Indian Telcos
Ever since a huge wave of change in the Indian telecom sector was triggered by the arrival of Jio in 2016, mobile operators have been constantly rolling out ‘new and improved’ plans in order to appeal to customers. The year 2019 is nearing its end and the journey for some telcos in India hasn’t been smooth. With the new Supreme Court judgement ordering legacy players to pay billions of dollars due to the government, Vodafone-Idea and Airtel have incurred major losses in order to provide for the expected payout. Even though the government has extended these companies’ timeline to pay their dues, the competition and the desire to become more profitable has led operators to roll out the higher-priced plans for their consumers. Mobile network tariffs have gone through significant changes in 2019. Over time, consumers’ preferences have changed, which puts a lot of emphasis on data usage on their mobile devices. This means that users require internet on-the-go, with data packs that will allow them to surf the web, watch the latest shows, and play games to their heart’s content.
All the networks have introduced new plans in the first week of December, some hoping for a change in fortunes over 2020, others in order to deliver better value to customers. Let’s take a look at how these new plans change things for customers and telcos alike.
Reliance Jio’s All-In-One plans
During the initial months of Reliance Jio, they just focussed on getting subscribers on board and provided free services to everyone for a period of 10 months, after they launched their operations. They later started offering the cheapest mobile network tariffs to their consumers, which put a lot of pressure on their competition to retain existing users. Jio offered benefits like data, unlimited calls, and SMS at lowest rates available at the time. Jio’s entry turned out to be a revolution in the telecom sector of India. The company committed that they will always price their offerings at 20% lower than competitors.
Before the IUC charges, Jio had all-in-one plans starting from ₹149, which gave users unlimited calls to any network, 1.5 GB data per day, and 100 SMS per day, with a validity of 28 days. If this wasn’t enough, Jio also had an 84 days validity plan. By paying an additional ₹250, the user got unlimited calls to any network, 2 GB data per day, and 100 SMS per day, for a period of 84 days. The yearly plan, which included the same benefits as the 84 days plan, was also priced at a rather low rate of ₹1699.
Recent steps taken by the Telecom Regulatory Authority of India (TRAI) to rethink the planned scrapping of IUC charges urged Jio to recover IUC of 6 paise/minute for calls to other operators. The new IUC charges are meant to slightly offset the unfair financial burden on the operator. The new all-in-one plans now start at ₹199 for a validity of 28 days. This gives users unlimited minutes for Jio-Jio calls and 1,000 minutes for non-Jio-network calls, 1.5 GB data per day, and 100 SMS per day. This comes with a complimentary subscription to all the Jio apps as well.
Jio’s most beneficial plan after the hike in prices is the ₹555 plan, which offers free voice and video calls to any Jio or landline number, across India. All outgoing calls to other networks are charged at 6 paise per minute, but this plan offers 3,000 minutes free for non-Jio-network calls with a validity of 84 days. As a part of this plan, Jio offers 1.5 GB of data per day, for the entire validity period. The subscribers will also get 100 SMS per day along with a subscription to all the Jio apps like JioTV, JioCinema, JioHealthHub and others. If a user needs to use more data per day, they can go for the ₹599 plan, which will give them the same benefits as the ₹555 plan, but with an increased data usage limit of 2 GB per day.
Airtel’s Competitive Plans
Airtel is one of the biggest telecommunication companies out there, with more than 300 million subscribers in over 20 countries across the globe. Recently, however, they are struggling to retain customers in their biggest market, India. Lately, Airtel and Vodafone-Idea have been announcing plans very similar to each other.
Talking about Airtel’s cheapest 4G all-in-one plans, the company used to offer 1.5 GB per day at ₹199, before the recent price revisions. Apart from mobile data, users could also get access to unlimited calls to any network along with 100 SMS per day. However, seeing Jio pass on IUC charges to their customers, and looking at the huge sums they owe the government, Airtel introduced new plans, increasing their prices across the board by up to 47%.
After the price hike, the new tariff plans include month-long validity, which offers their users plans that are still competitive enough in the market. For ₹248, users can get access to 1.5 GB of mobile data per day along with 100 SMS per day, with a validity of 28 days. For users who don’t want to get into the hassle of recharging every month, they can pay ₹598 and get the same benefits as the ₹249 plan, for a validity of 84 days. The year-long subscription for the same benefits cost ₹2,398. New Airtel plans also offer benefits to users such as, access to Airtel Xstream, Wynk Music, device protection, anti-virus packages, and more. It is worth noting that these prices are substantially higher than those offered by Airtel’s main competitor, Jio.
Vodafone-Idea’s Recharge Plans
Vodafone predominantly operates in regions like Asia, Africa, and Europe, and has a growing number of 312 million subscribers, across the world. Vodafone-Idea, the merged entity, was brought together in the face of unwavering competition from Jio. Nonetheless, they are still far behind in the battle between the telcos, to add customers in India. While the company gained market share with its merger, customers have been fleeing their services in droves. The network has lost most subscribers in 2019. In tandem with Airtel, Vodafone-Idea also announced their revised prices to regain their profit margins.
Vodafone-Idea’s cheapest, all-in-one, 4G plans started from ₹169 before they announced the price hike. In this plan, they offered 1 GB internet per day for a validity of 28 days. Apart from mobile data, this plan also had the benefit of unlimited outgoing calls to any network, plus 100 SMS per day.
Vodafone-Idea ended their ₹169 and ₹199 plans after the price hike and introduced a plan for ₹219, similar to Airtel. The ₹219 plan is their cheapest plan with daily data benefit. In this plan, they offer their users 1 GB per day, with a validity of 28 days. Users who want more daily data can opt for the ₹249 plan, which offers the same benefits as the ₹219 plan with 1.5 GB data per day. For a longer validity of 84 days, a user can pay ₹599 and get 1.5 GB data per day.
Airtel and Vodafone-Idea had announced a tariff hike of almost 50% which sent huge shockwaves across the country. The new recharge plans came into effect on December 3, 2019, which gave a sigh of relief to these operators, dealing with huge losses and declining average revenue per user (ARPU). Mukesh Ambani’s Reliance Jio also announced new plans which took effect on December 6th, 2019. While all three telcos have raised the tariffs. Jio still remains the most pocket friendly and value for money among them and tops the charts on this front.
In a recent development, the Telecom Regulatory Authority of India (TRAI) announced an extension of IUC charges till December, 2020. This is a year longer than initially planned. The extension comes at the behest of Airtel and Vodafone-Idea, who wanted the scheme to continue till 2022. The one-year extension will mean that there is unlikely to be a reduction in prices over the next calendar year, however, one may come starting in January 2021. In 2020, we expect an increase in ARPUs across networks, but this will do little to stem the flow of customers from Airtel and Vodafone-Idea to Jio. Only time will tell whether the companies can turn things around and give decent competition in terms of quality of service. A healthy, competitive environment will benefit consumers the most.
