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Mobile Data Tariff Wars: Idea Reacts To Vodafone, Slashes 2G Data Charges By 90%

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We just covered Vodafone’s half yearly financial results for 2013, and reported that revenues from data usage have exploded like never before. Vodafone had earlier slashed their charges upto 80% and this had resulted in huge increase in subscribers and revenue.

We expected some reaction from Idea; but never knew it would be so fast and so furious: Idea has announced that 2G data charges on their network would now be discounted at 90%. Previously, under the pay-as-you-go plan, Idea users paid 2 paisa per 1 KB to browse Internet on their smart phones.

From now on, the revised charges are 2 paisa per 10 KB, which means 90% of the data charges have been slashed. To start with, this revised data plan would be applicable in 10 Idea circles: Maharashtra & Goa, Madhya Pradesh & Chhattisgarh, Kerala, UP West and East, Andhra Pradesh, Gujarat, Haryana, Jammu & Kashmir, and Himachal Pradesh.

Idea logo-001

For 3G data usage, Idea has discounted 30% of overall charge. Previously, Idea charged 3 paisa per 10 KB, which now has been revised to 2 paisa per 10 KB. However, the revised 3G data charges are promotional in nature, and as per official communications, the new data charges are applicable till May 15, 2014 (6 months from November 15).

The new 3G data usage charges effectively means that Idea has made both 2G and 3G data available at the same price. Reliance was the first operator to start this trend, when they slashed their data usage charges by 50% this July. Earlier, for 1Gb of 3G data, Reliance users paid Rs 250; which was revised to Rs 123 for 1GB 3G usage.

Idea has 3.3 crore users who use internet on their mobiles; out of which around 40 lakh users have opted for 3G services. By making both 2G and 3G at same rate, Idea is trying to shift customers from 2G to 3G and hence, encourage them to use more data which translates to more revenue for the company.

Now, there is a full fledged price war happening in the Telecom industry. Idea, Vodafone and Reliance have made the necessary amendments to lower the data charges and make it easy for consumers to use Internet on mobile.

Only Airtel has the most expensive data plan currently available. If we take Delhi circle for Postpaid users, then 2G data on Airtel costs approximately 1 paisa for 1 KB for 2G usage and 3 paisa for 10 KB of 3G data usage.

Technology Entrepreneurs who are into the mobile apps business or mobile ecommerce sector must be keeping their fingers crossed. Cheap mobile access to millions of users all over India translates to bigger, better and more vibrant market to sell their products.

The mobile revolution in India has entered the second phase, for sure.

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