Following industry leader Bharti Airtel move to cut tariff, Aditya Birla Group firm Idea Cellular on Tuesday announced slashing charges for 3G services by up to 70 per cent.
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Idea prepaid and postpaid customers will now have to pay 3 paise per 10 KB of data against the earlier rate of 10 paise per 10 KB.
"The new tariff plan aims to make internet usage within the reach of rural, mid-town customers at home and will help first time users to experience the benefits of 3G. Idea's objective is to drive mobile internet usage for the mass market," Idea Cellular said in a statement.
Last week, Bharti Airtel had announced similar cuts for its third generation (3G) high speed internet services.
Another operator Aircel offers unlimited 3G plans with tariffs starting at Rs 8 per day.
The price war comes at a time when operators are up in the arms over sectoral regulator Trai 's recent recommendations on spectrum auction.
They have warned that mobile bills could increase by up to 100 per cent in certain circles if the proposals are accepted.
Industry experts are of the view that the brewing price war in 3G tariffs may be an effort to cash huge investments made by telecom operators.
The government had received over Rs 67,000 crore from the 3G auctions held in 2010. With operators taking huge loans to pay for the 3G licences, experts say operators are under pressure to recover the investment, which could see more operators slashing tariffs in the coming days.
Idea Cellular, which has 3G licences for 11 telecom circles, including Gujarat, Andhra Pradesh and Kerala, has also increased usage limits across different plans for prepaid and postpaid users.
Idea's Rs 10 pack will offer 30 minutes of high speed internet surfing instead of 20 MB data usage (one day validity), while its new Rs 25 plan will give 100 MB data with 3 days validity.
For home and Small office/home office (SOHO) users, 1 GB of data download will cost Rs 250, while its unlimited usage plan will be priced at Rs 950.