Airtel cuts data price by 33%, as Reliance Jio threat looms

It appears Airtel is seeking to prevent the upper end of the market from moving to a rival's network by throwing in more benefits for the same price

In a bid to defend its data market share, the country's largest telecom company, Bharti Airtel, has come out with prepaid data packs intended to drive higher usage. The packs allow unlimited data at Rs 51/GB, provided the customer makes an upfront commitment of Rs 1,499.

It appears that Airtel is seeking to prevent the upper end of the market from moving to a rival’s network by throwing in more benefits for the same price.

Ever since Reliance Jio announced its free trial offer, data usage of incumbents has been on the wane. According to Bank of America Merrill Lynch, recent discussions with industry participants suggest that the data growth of incumbent operators is getting impacted, albeit not significantly, from Jio’s free data/voice offering, which is in the test phase. This is expected to continue till the trial offer lasts.

This possibly explains Airtel’s two data packs. The Rs 1,499 pack offers 1GB 4G/3G data upfront with a validity of 28 days. After exhaustion of this limit, the customer can enjoy 1GB 4G/3G recharges for just Rs 51 over a period of 12 months. There is no limit on the number of recharges during the period. Says Ajay Puri, director – operations (India & South Asia), Bharti Airtel, “With these innovative packs, we are redefining the value proposition on our data packs and allowing our customers get a lot more within the same budget.”

If the customer uses 1GB per month, then under this plan the customer stands to save merely 33 per cent. At regular prices, a consumer will spend Rs 3,000 for 1GB data every month. With this pack, the consumer will spend Rs 2,060. Savings will increase if usage goes up. The packs are designed mainly for the upper end of the market. However, given that 43 per cent of the prepaid market makes recharges of Rs 10 and accounts for average monthly revenues of Rs 170, Airtel’s data packs are only for the top end of the market as it seeks an upfront commitment of Rs 749 or Rs 1,499.