Mukesh Ambani-led Reliance Jio has unleashed a war of sorts by rolling out its new post-paid plans in its bid to target high tariff paying Airtel and Vodafone Idea users.
The telco unveiled brand new post-paid tariff plans on Tuesday, September 22 to woo higher paying subscribers of its incumbent rivals and the country's older operators.
This price competition in the mobile telephony space is going to benefit customers a great deal. (Reliance) Jio's move could possibly trigger another round of competitive pricing which would only eat into the revenues of the incumbent telecom operators in the country who are already reeling under the pending AGR dues owed to the government and unsustainably lower tariffs amid intense competition.
The Tuesday's announcement by Reliance Jio has only added to the din. The telco unveiled a gamut of offerings for post-paid users comprising family packs and access to OTT platforms, a first from the company which has so far nearly fully concentrated on prepaid customers.
What is Reliance Jio offering?
The telco on Tuesday launched a fresh post-paid plan- Postpaid Plus- that offers a slew of services comprising in-flight connectivity for Indian travellers flying abroad, free international roaming in the US and UAE, OTT subscriptions such as Amazon, Netflix, and Disney+Hotstar, among others.
To avail these services, Reliance Jio unveiled new post-paid plans wherein in the monthly tariff charges are as follows: Rs 399, Rs 599, Rs 799, Rs 999, and Rs 1,499. Moreover, these packs come bundled with individual offers and data limits as per the users' needs.
The telco has also introduced offers for post-paid users of other operators to carry over their credit limit to the Jio network in case they choose to port to Jio connections. The company is also offering free home delivery of new SIM cards.
What are Airtel and Vodafone Idea's offerings?
Where Airtel's monthly post-paid plans begin from Rs 499 whereby it offers 75GB data and unlimited voice calling. The telco's offer also includes a one-year free subscription to Amazon Prime, Airtel Xstream App, and Zee5.
Vodafone Idea's post-paid plans start at Rs 399 per month whereby it offers 40GB data along with 100 messages and unlimited calls for a month along with free Vodafone Play subscription and Zee5 Premium access for a year.
Reliance Jio vs Bharti Airtel, Vodafone Idea
Reliance Jio's base post-paid plan, at Rs 399 per month, is similar to what Vodafone Idea is offering and is 20 per cent (Rs 100) cheaper than Airtel's entry-level plan priced at Rs 499.
However, Jio's value proposition (offering higher data) is more than Vodafone Idea, whereas, it is offering more content subscriptions than Airtel in its entry level pack.
It is also noteworthy here that Jio is already offering a much cheaper Rs 199 monthly post-paid plan but it still tails in post-paid business, despite surfacing as a large telecom company in the Indian market.
Airtel and Vodafone Idea hold sway over the post-paid market in the country with a lion's share of such subscribers- 71 per cent in FY20, according to data collated by Jefferies India Pvt Ltd.
Customer loyalty has helped these telcos tide through the blows dealt by Reliance Jio time and again, helping them retain a large share of their subscribers, even when the market size contracted in recent years.
How big will the impact be on Airtel, Vodafone Idea's business?
Will Reliance Jio's new offerings inflict churn in Airtel and Vodafone Idea's postpaid mobile business? Well, how big a jolt it will be to the two incumbent operators is yet to be seen, but Reliance Jio has packaged its post-paid plans well scoring over Airtel and Vodafone Idea.
Reliance Jio's move comes at a time when both Airtel and Vodafone Idea have been talking about the need to increase the prices promptly to mend the telecom industry's financials. Jio is the only profit-making telecom operator in India.
Reliance Jio entered the telecom market in the year 2016 storming it with pre-paid plans bundled with dirt cheap data and free voice calls.
This triggered rapid consolidation in the telecom industry, leading to revenue erosion of incumbent operators. Jio outdistanced its older rivals with its cheaper pre-paid plans, emerging as the market leader within four years of its debut in the telecom market.
While Jio has approximately 400 million subscribers, Airtel and Vodafone Idea's user-base pans around 280 million each.