Mukesh Ambani-led Reliance Jio Infocomm has triggered another tariff war in the telecom industry with its cheapest offering in the postpaid segment.
Jio will offer the Rs 199 a month plan to consumers from May 15, which will include 25 GB of data, international calls starting at 50 paise per minute and international roaming at Rs 2 each per minute of voice, per MB of data and per text message.
As per Jio claim, the rates are lowest in the world.
— Reliance Jio (@reliancejio) May 10, 2018
Besides, it will allow free access to all Jio apps.
A refundable security deposit of Rs 250 will be charged for Rs 199 plan in addition to JioPrime membership fee of Rs 99. The newly launched Postpaid plan is applicable for both new as well as existing customers.
At present, the post-paid tariffs of Airtel, Vodafone India and Idea Cellular offering 20 GB of data start at Rs 389 or Rs 399, with international roaming rental of Rs 149 a month.
The move will have a larger impact in postpaid segment, which is reportedly around 5-8 percent of total telcos consumers. Ever since Jio launch, the tariff war has only intensified.
After making a dent in pre-paid segment, Jio would be aiming to attract and acquire postpaid consumers from existing market.
Vodafone, Idea and Airtel, who are fighting closely with most of the offers from Jio, will in all likelihood come up with a similar offering.
The average revenue per user (ARPU) for pre-paid customers is about Rs 150. Whereas ARPU for postpaid customers is about Rs 500 per month. Jio’s ARPU was the highest at Rs 137. Airtel’s ARPU was Rs 116 whereas Idea’s was Rs 105, according to TRAI report.
According to an industry estimate, postpaid accounts for around 25 percent telecom revenue.
In last few years, Airtel, Vodafone and Idea witnessed downfall in revenue and profitability substantially, leading to about 19 per cent decline in the industry’s adjusted gross revenue (AGR).
However, Jio’s AGR climbed to Rs 7,466 crore last year, a steep rise from a recorded loss of Rs 303 crores in 2016. Currently, Jio claims to have around 168 million subscribers.
Will this trend continue? Maybe or maybe not.
But looking at past trend and telecom players behaviour, one thing is certain that there will be more offerings for consumers in coming days.