The fight between new entrant Reliance Jio and the incumbent telecos could become more intense in the days ahead as market leader Bharti Airtel chief Sunil Mittal announced that his firm would make roaming free.
"I am declaring war on roaming", Mittal said as Bharti Airtel removed roaming charges for outgoing and incoming calls as well as SMSes and data usage within India. The announcement comes after last week Reliance Jio chief Mukesh Ambani said there would be no roaming charges on Jio and voice calls would always be free.
Since the launch of Reliance Jio, older operators Airtel, Idea and Vodafone have been forced to cut their tariffs and offer cheaper data rates to consumers. Aitrtel's decision to remove roaming charge seems to be another step to match Reliance Jio's offer to the consumers.
The older telcos are already facing the heat of Jio which has so far kept its services free. Airtel, Vodafone and Idea Cellular are already finding it difficult to survive Bharti Airtel, for instance, registered 54.9 per cent drop in net profits in third quarter of 2016/17 as compared to corresponding period last year. Idea Cellular was even worse. It reported a loss of Rs 383 crore in the same quarter.
But in his keynote speech during the MWC in Barcelona, Mittal said Reliance Jio's aggressive pricing won't turn out well for the industry and ultimately might have a toll on the average consumer.
Airtel's chief, Sunil Mittal believes the current prices are not sustainable for the entire telecom industry, despite Reliance Jio's announcement to charge for their services from April 1. He also opined that Reliance Jio has kept them on toes with its aggressive pricing and the company will have to throw in more data and more packages to deal with the competition.
Mittal was also critical about the government's policy of the past to increase the number of operators in the country. The government was mistaken to think that more operators would yield more income for the government, he said.
"Governments have got it wrong for too long. Regulators have always felt giving out new licenses means more money for the government and more competition for the customers. It's quite the contrary," he said delivering a keynote address at the Mobile World Congress.
He added, "You really want a few sustainable solid operators, who can put out the investments that are required to deal with the new technologies, demand of data, the speeds that you want. It's extremely important that the regulators re-calibrate demand."
He expressed delight that finally Indian government is comfortable with the country having five operators now, from 12 a few years ago.
Country's largest telco Bharti Airtel on Monday announced 'war on roaming' or free incoming calls/SMS and no premium on outgoing calls while roaming across India.
On the overseas roaming charges, the firm said daily billing would be adjusted to the price of basic one day pack even for customers who don't buy a roaming pack.
The 17-18 countries Airtel operates-in will allow its customers to have the freedom to switch on their mobile phones "wherever and whenever they want". Mittal said "90 per cent of people turn off their data when they travel," including himself, and wait until they can find wi-fi in their hotel or buy local prepaid SIM cards to avoid stiff charges.
"We have a global network, but very few people are allowed to enjoy it," he said, adding that "it (exorbitant fees) is a disaster our industry has created".
Despite vast network "55 per cent of our people in the developed world switch off their mobile data. It is my estimated guess that 90 per cent of travellers from emerging markets switch off their mobile data. They go for local SIM cards, they go for the nearest wi-fi spot, they wait for themselves to get to their hotel. What have we done to our industry? This must stop," he said.
The industry needs to address this as well as the disdain its customers have for operators, he said. "I can promise you that during my term at GMSA, roaming charges and bill shocks will be a thing of the past. I promise you that," said Mittal, who is also the chairman of the GSMA, the trade body for the mobile industry.