The great Indian telecom battle has been heating up into quite a battle royale.
August 5 was an alarming day for the Cellular Operations Association of India (COAI), as Reliance Jio Infocomm Limited announced its big upcoming launch of a 4G network across the nation.
COAI is majorly formed by Bharti Airtel, Vodafone and Idea Cellular - the biggest competitors of the debutant Reliance Jio. Hence there is plenty of reluctance among the operators to welcome another telecom giant in the packed cellular services industry.
With half a million activation and a million recharge outlets, Reliance Jio is planning an all-out assault on the existing big three - Airtel, Vodafone and Idea. Jio Infocomm’s announcement that the company would set up 5,00,000 activation outlets for its grand launch of Reliance Jio 4G services in a few months was certainly a rude wake-up call for private service providers in India.
As soon as the announcement came, at the end of the first week of August, share prices of Reliance Industries shot up by 100 points in a week. In the same period, Bharti Airtel’s stock prices went down by approximately 20 points. While these weren’t big deflections, they clearly showed that the Reliance Jio would make life tougher for the other service providers.
In retaliation, on August 12, the trio, via the COAI, wrote a letter to the Telecom Ministry, TRAI and the PMO, alleging that certain companies had earned 'hundreds of crores' by selling handsets (which had sim cards pre-installed in them), without paying the relevant taxes to the government.
This was a barely disguised attack on Jio, which sold its LYF handset with Jio sims pre-installed. Reliance Jio was quick to hit back saying that the allegations were baseless and were made only to "malign" Jio’s image in the market.
The battle turned uglier when the COAI accused government authorities of being biased and giving extra privileges to the Mukesh Ambani-owned Reliance Jio Infocomm. However, the allegations were later dismissed by the TRAI.
The panic of Bharti Airtel didn’t just show up there. Last month, Airtel had slashed its mobile data tariffs by 67 percent and also fast-tracked the repairing of its flat network areas, to solve its chronic call drop and network issues - all in reaction to Jio.
The company has been installing new towers to improve the network and recently upgraded 9,000 towers and optimised 30,000 towers. This is sufficient evidence to indicate that that the cellular giant is pulling up its socks for an expected threat.
Surprisingly, it is not just private ventures, but also Bharat Sanchar Nigam Limited (BSNL), which has cut down rates by half to ensure survival in the market. In a recent company statement, BSNL doubled the limit of data usage in its existing plans and had also announced a new 3G national roaming plan for ₹1,099.
Idea Cellular has also increased the limit of data usage by approximately 70 percent.
This whole drama by existing service providers of serving maximum data to customers at the lowest price is just to ensure user retention, mostly of corporate clients. Afterall, Reliance Jio is offering three-month free 4G data and calls to customers.
Whatever the tussle may be, the benefit of increasing data limits is coming to the customers of existing networks with not much loss to the service providers.
The upheaval in the telecom industry has made one thing very clear - every network seems capable of slashing mobile usage tariffs by over 50 percent, and still make a fair profit.
Now there is a thought for customers to ponder upon.