Do or Die Situation: Idea, Vodafone, Airtel May Slash Tariffs to Face Reliance Jio Ambush 

New Delhi: The Indian telecom market is back to the tariff game now. The cheapest data tariffs and free voice calls and roaming from Reliance Jio have created a do or die situation for other telecom operations. The spectre of price war triggered by Reliance Industries (RIL) is pushing other players to compete to stay afloat in the market or exit.

The cut-throat competition is good for consumers, but not for the industry. The telecom industry is already sitting on Rs 35,000 crore of debt. With fresh airwave auctions coming up, this debt burden is likely to pile up further. A margin-denting price war at this time will hamper the recovery the industry has been witnessing.

Analysts predict that Bharti Airtel, Vodafone and Idea Cellular would be forced to slash their rates soon to respond to the enticing tariffs that Reliance Jio Infocomm is offering.
Jio’s data packages are priced at one-fifth of what is charged by existing mobile operators. The 10 main plans of RJio include Rs50 per GB against the current market price of Rs250 per GB.

For extensive users, it’ll be Rs15 only. Jio price starting from Rs19 ofr occasional data user to monthly Rs149 plan for light data user. For those heavy data users, monthly plans are available upto Rs4,999 per month. Above all, voice calls are free for first three months beginning from September 5.

Later, all voice calls on Jio network are free for life in addition to free roaming as well.
Mukesh Ambani-controlled Rilance Jio is expected to disrupt the market with cheap prices and its pan-India network. Analysts see this compelling the existing players to announce tariff cuts over the next few weeks to ring-fence customers in a market that is highly price sensitive. Mukesh Ambani has set a target of signing up 100 million subscriber base.

Rajan Mathews, Director General of GSM industry body Cellular Operators Association of India (COAI), said: “The incumbents could match Jio’s launch offerings. The battle lines have now been clearly drawn. You have Jio with Reliance Communications, Aircel and MTS on one side and Bharti, Vodafone and Idea Cellular on the other.”

The cut-throat competition is good for consumers, but not for the industry. The telecom industry is already sitting on Rs 35,000 crore of debt. With fresh airwave auctions coming up, this debt burden is likely to pile up further. A margin-denting price war at this time will hamper the recovery the industry has been witnessing.