Worried telcos are taking on Jio – with freebies
Even if you are one of those spending Rs 400 to Rs 500 on your mobile phone a month, you are sure to be greeted by telcos' new offers of bucket or bundle plans of free voice calls, combined with data.
Generous hunks of data bundled with loads of free voice minutes, content and services at a fixed price is the heart of the new bucket scheme.
Industry insiders and analysts see this as an after-effect of Jio Infocom’s launch offer of free voice calls for life, combined with certain internet data packs under one bucket.
All three major rivals like Bharti Airtel, Vodafone and Idea Cellular are thus coming up with innovative bundle plans of free voice calls plus internet data at a low cost, starting from Rs 299 per month.
The migration to new bucket plans by the Big 3 has begun with the sole idea of retaining high-end customers amid the current churn for new customers.
This is inevitable for the top three, otherwise they will disappear into oblivion.
They have quickly taken stock of the situation and restructured their tariff plans by moving to bundle plans, in their common goal to take on competition from Jio.
Jio firmly believes the Big 3 depend greatly for revenue on their voice segment and are therefore likely to try any trick or treat to woo customers, right after Diwali till the New Year and beyond.
In such a scenario, to hold on to higher paying customers, Jio rivals need keep their offers attractive with both sides cream and butter, if possible.
Even if it eats into their revenues initially, this is a must to stay in business, and that much is clear.
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| Jio’s free voice and data welcome offer is valid till December 3. |
Voice services make up nearly 80 per cent of revenue for other incumbent call carriers. Airtel has already announced aggressive marketing actions in its 4G space. It indicated it will retain some regular tariff plans that charge voice and data separately.
Airtel said half the country’s telecom market in the medium term would comprise feature phones, where voice and data tariff would remain decoupled, while the smartphone turf could see some demand for bundled products.
Jio’s free voice and data welcome offer is valid till December 3 and some say it is likely to be extended up to March 31 next year.
It's just a matter of time before decoupled voice and data tariff plans disappear totally, paving the way for bundled plans since voice-only customers are a dying phenomenon, much like the feature phone.
Analysts though rule out the possibility of unlimited data offers under bucket plans. Nitin Soni, director at ratings firm Fitch, said it would be virtually impossible for any telco to offer unlimited all-you- can- eat data under a bucket plan on a regular basis.
Spectrum is expensive in India and the associated network capital requirements would also be huge for handling any potential upsurge in data consumption when it is free.
Even in more evolved markets like Singapore, Korea and the Philippines, telcos could not sustain unlimited data offers within bucket plans and had to charge it on a pay-as-you-go basis beyond the free allocation level.
Such plans are unlikely to resonate well with the masses as they could come at a high fixed monthly charge, making them unattractive.
Telcos also dismiss the chances of free offers of equipment /devices under bucket plans, on the grounds that prevailing low average revenue per user and tariffs would not permit them to subsidise devices.
Lastly, India, unlike the US, Europe,and Japan, is primarily a prepaid market with a multi-SIM scenario where contractual obligations of a long-term nature are tough to create and enforce.
At the end of the day, it is going to be a bucketful of plans and wishes all the way to New Year from telecom companies to cellphone users, with chunks of data bundled with lots of free calls and internet services at a fairly low price - of say Rs 400 to Rs 500 per month.