Wednesday, 11 December 2019

Indian telcos raise tariffs and declare an end to the country's bitter price wars

By Chris Kelly, Total Telecom
Monday 02 December 19

Indian telcos have been involved in a race to the bottom on price, ever since the country's disruptive operator, Reliance Jio, began offering ultra-low-cost 4G data tariffs in 2016

Bharti Airtel, Vodafone Idea and Reliance Jio have all announced new, costlier monthly tariffs, bringing to an end a protracted price war between India's big three telcos. The move is intended to help telcos boost their Average Revenue Per User (ARPU), which is currently hovering around the $1.50. Earlier this year…

Bharti Airtel, Vodafone Idea and Reliance Jio have all announced new, costlier monthly tariffs, bringing to an end a protracted price war between India's big three telcos.

The move is intended to help telcos boost their Average Revenue Per User (ARPU), which is currently hovering around the $1.50.

Earlier this year, Indian telcos announced plans to unilaterally kill off their ultra-low-cost tariffs, which had left operators trading on wafer thin margins.

Indian operators are set to increase the cost of their monthly voice and data tariffs by between 15 – 40 per cent.  

"Our new mobile plans offer tremendous value to our customers and are backed by a superior network experience on Airtel's nationwide 4G network," Shashwat Sharma, chief marketing officer, Bharti Airtel, told members of the press on Monday.

Vodafone Idea has faced particularly intense financial pressure over the passed months, with Vodafone Group CEO, Nick Read, calling the JV's status "critical". Vodafone Idea issued the following statement on Monday, announcing its new higher priced tariffs:  

"In line with its commitment to provide customers with simple, convenient and affordable products, VIL has curated an optimum range of feature rich plans for both voice and data. Customers can avail their benefits by just selecting the plan best suited to their specific needs and continue to enjoy seamless connectivity across India," the statement read.

"VIL continues to actively invest in building digital infrastructure by embedding new age technologies to make its network future-fit. Building on its largest spectrum footprint and by accelerating its network integration, VIL is speedily expanding both its coverage and capacity and is well on track to offer 4G services to 1 billion Indian citizens by March 2020."

Shares in all three telcos rallied on Monday morning, as markets reacted favourably to the news of the price hikes.

Shares in Vodafone Idea jumped by over 22.5 per cent, while shares in Bharti Airtel and Reliance Industries gained 7.3 per cent and 2.6 per cent respectively.

The new tariffs will come into effect on the 3rd of December 2019.   

Also in the news: 

Indian govt refuses to cut 5G spectrum pricing ahead of auction

Could India be preparing to delay 5G by 5 years? 

India disbands committee with no relief package in sight

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