Vodafone, Airtel & Idea ‘Plans’ to Counter Jio’s Rs 49 Plan!
Jio is forcing the telecom market to sway to its tunes with ultra-low-cost priced plans.
Last week Reliance Jio announced an all-new Rs. 49/- plan as a part of its Republic Day offer. The plan offers unlimited data with 1GB of high-speed data and unlimited call benefits for 28 days at the lowest rate in India (as of February 1, 2018).
Alongside the Rs. 49/- plan, the company also launched affordable data add-ons at Rs. 11/-, Rs. 21/-, Rs. 5/-1 and Rs. 101/- for Jio Phone users. Jio had announced its 4G VoLTE-enabled Jio Phone last year. It is available at an effective price of Rs. 0/-.
Jio’s Predatory Rs 49 Plan
The launch of Jio’s new Rs 49 plan came as a big blow for Bharti Airtel, Vodafone India and Idea Cellular. Now, these telecom operators will be releasing similar plans to compete with Jio’s low-cost plan. As per industry sources, these telecom operators are planning to unveil some attractively priced tariff plans with mobile data bundled with voice calling, exclusively for feature phone users.
The feature phone market primarily consists of voice on 2G, which accounts for around 65-70% of India’s billion-plus mobile user base and 50% of telecom sector revenues. The feature phone segment plays a critical role for India’s older operators Airtel, Vodafone, Idea, BSNL and others, who want to prevent users migrating to the newer entrant, Jio.
Other Telecom Operators Are Worried
The Jio’s Rs. 49 per month plan offers the sector’s lowest price plan possible with free voice-calling for life and unlimited data, which includes 1GB of high-speed data, over a period of 28 days.
The new plan could help the newest mobile carrier to eat into the feature phone market of incumbents who currently dominate the 2G market and rural markets unless the companies come up with similar aggressive plans.
Already the Jio Phone has captured 27% of the feature phone market in India and recently toppled Samsung to become the feature phone segment leader.
Jio’s Rs. 49 Plan Forcing Airtel, Vodafone & Idea For VoLTE-based 4G
The telecom sector in the country is engaged in a fierce price competition. The cut in the interconnect rates have compounded the pressure on voice and data businesses amid continuing price wars.
Kotak Securities has said that Jio’s new pricing moves target to add millions of 2G feature phone customers from the incumbent carriers, and this would would further damage their already weak financials.
This would force the operators to take tough calls like shutting down their 2G and 3G networks ahead of the current plans and would force the other telcos to roll out VoLTE based 4G networks on a war footing. The latest price move by Jio will intensify the competition even further in the telecom space.