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Jio effect may force Airtel, Idea and Vodafone to come up with bucket plans

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As an after-effect of the Reliance Jio launch offering free voice calls, Airtel, Idea and Vodafone are expected to come up with plans where the customer won’t be paying separately for voice and data. At a fixed price, both will be offered under one bucket plan i.e. data bundled with free voice minutes, content and services.

Bharti Airtel’s former Chief Executive Sanjay Kapoor said “This is inevitable for the top three. They will restructure their tariff by moving to bundled plans “in their aim to counter Jio. Jio realises that Airtel, Vodafone and Idea are hugely dependent on voice revenues”, and is likely to try every trick in the book to capture the imagination of their lower-end voice customers through its unlimited voice offers with bundled data”.

Under these circumstances, to keep the game on, Jio’s rivals will have to make their offers attractive, even if that means taking a hit on their revenues initially. Airtel and Idea have already declared that they will contest the 4G space with bundled plans once Jio starts charging customers as Jio’s free voice and data welcome offer is valid till year-end for those who subscribe to its services till December 3. Airtel indicated that it will retain some regular tariff plans that charge voice and data separately.

Nitin Soni, director at ratings firm Fitch, said it would be virtually impossible for any telco to offer unlimited all-you-caneat data under a bucket plan on a regular basis since 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 offered free. Even in more evolved markets like Singapore, Korea and the Philippines, telcos couldn’t sustain unlimited data offers within a bucket plan and had to charge it on a pay-as-you-go basis, beyond the free allocated level”.

 

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