Jio, Airtel and Vodafone Idea To Hike Pre-paid Tariffs by over 40%; Try To Compensate Customers with Data, Other Services
Partially ending the free call regime, major telecom operators Reliance Jio, Vodafone Idea, and Bharti Airtel have increased pre-paid tariff by more than 40% across the recharges. However, operators are trying to compensate customers with enhanced data and other services. While Jio has increased tariff by 40% without sharing the actual tariff, Airtel and Vodafone Idea have increased prices of their existing packages by as much as 50%. In addition, mobile companies have decided to charge six paise per minute for calls, after crossing limited calls under the fair usage policy (FUP).
While the new tariff plan of Jio would be effective from 6th December, Airtel and Vodafone Idea customers will pay higher charges from 3rd December. There is no word on tariff for post-paid subscribers by any telecom company as of now.
The hike in tariff comes after three years when majority of telcos are facing severe financial stress. Especially, the recent ruling by the Supreme Court on adjusted gross revenue (AGR) had hit Vodafone Idea and Bharti Airtel very hard. In fact, after making provision for the AGR, Vodafone Idea reported its highest quarterly loss of Rs50,922 crore for the September quarter.
Vodafone Idea announced that the 'on-net' voice calls would be billed at six paise per minute. The 'on-net' voice calls after the provided FUP limit will be charged 6 paise per minute, similar to Reliance Jio. It is also providing bundled 'on-net' minutes, whereas Jio will be charging customers for IUC 'top-up' vouchers.
In a statement, Jio said, its new 'all-in-one' plans will be priced up to 40% higher, while providing up to 300% more benefits to its subscribers. Jio will be introducing new 'all-in-one' plans with unlimited voice and data. These plans will have a fair usage policy for calls to other mobile networks. The new plans will be effective from 6th December," Jio said.
(Current Plans offered by Jio, which would witness tariff going up after 6th December)
Airtel's new tariff will be effective 3rd December, and its Rs129 pack for 28 days validity with unlimited calling, 300 SMS, and 2GB data would now cost Rs148.
In a statement, the telco says, "Airtel’s new plans, represent tariff increases in the range of a mere 50 paise per day to Rs2.85 a day and offer generous data and calling benefits. In addition, Airtel provides exclusive benefits as part of the Airtel Thanks platform, which enables access to premium content from Airtel Xstream of about 10,000 movies, exclusive shows, and 400 TV channels, Wynk Music, device protection, anti-virus protection and much more."
Airtel's Rs998 plan with 336 days validity witnessed biggest hike of almost 50%. Its new plan (replacing the Rs998 plan) would now cost Rs1,498 and offers 24GB data and 365 days validity. Airtel has doubled the data, while increasing validity by 29 days in the new plan.
Airtel subscribers, who wish to go for the Rs1,699 plan would now have to pay Rs2,398, which is an increase of 41%. This plan would continue to offer unlimited calling, 100 SMS and 1.5GB data per day.
Vodafone Idea's new tariff would be effective from 3rd December. It has launched 'first recharge packs' where the four first recharge packs will cost Rs97 with Rs45 talk time, 100MB data and voice calls charged at one paisa per second along with 28 days validity. Other three plans would cost Rs197, Rs297 and Rs647, which offer up to 1.5GB data a day and unlimited 'on-net' calling for 84 days.
The company has removed the all-rounder packs and introduced two combo vouchers of Rs49 and Rs79 with 28-day validity. It has announced new prepaid plans with two days, 28 days, 84 days, 365 days validity, and broadly compared with existing plans of similar nature. However, new plans are costlier by up to 42%.
Vodafone Idea's unlimited packs with 28-day validity are—Rs149 plan with unlimited voice, including FUP of 1,000 minutes for off-net calls, 2GB data, and 300 SMS. Its new Rs249 plan would provide unlimited voice including FUP of 1,000 minutes for off-net calls, 1.5GB data, and 100 SMS per day.
It's now expected that the State-run Bharat Sanchar Nigam Ltd (BSNL) could also follow suit and hike its tariffs. The government and the Telecom Regulatory Authority of India (TRAI) have made it clear that there will be no floor rate for voice or data and the telcos would have to thrash out pricing among themselves to cover losses.
Almost nine years ago, in an article, I had predicted call-based tariff to give way for data-based tariff
, which can be seen today by telcos preferring to give more data and limiting voice usage. “The telecom industry is going through an unprecedented phase of hyper-intensive competition resulting in a sharp fall in operating metrics, slowing down of revenue growth and declining profitability. However, one thing is sure. The rollout of 3G will put data-based services on a fast track. Looking at the way average revenue per user (ARPUs) have been falling across subscribers and given the present call rates, mobile service providers will soon have to explore other avenues in order to earn money. The possibility of massive increase in data-based services give operators an opportunity to create products and tariff plans with data-based services as base products instead of voice-based services, thus unlocking new revenue segments,” I wrote in May 2010.
After nine years, everything remains the same, except that now telcos are charging subscribers for 4G while providing the same quality for calls, data and other allied services. Telcos increasing tariff for pre-paid would result in reduction in voice calls for few days. However, since all mobile companies are compensating tariff hike by providing more data, many users would go for voice over internet protocol (VoIP) calls or video calls. For example, WhatsApp calls, calls using Google Duo and so on.
While telecom operators increasing tariff is a welcome step and would help them pare losses, hope they would use the money to upgrade customer experience and their services as well. Unless telcos provide services for which the subscribers have paid, no one would be able to make any profit or survive in the long run.