At a time when Reliance Jio is going aggressive to capture market share, Bharti Airtel has also stepped up to take on the competition with lucrative offerings.
At a time when Reliance Jio is going aggressive to capture market share, Bharti Airtel has also stepped up to take on the competition with lucrative offerings. The telecom operator on Monday lowered the entry-level tariffs for its postpaid family plans. It launched a Rs 599 postpaid family plan and two other plans — Rs 799 and Rs 998 — as part of its all-in-one Airtel Black offering.
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While all the newly-launched postpaid offers support one add-on connection with OTT plans of Amazon Prime, Disney+Hotstar, and Airtel Xstream, the Rs 799 and Rs 998 plans come with direct-to-home (DTH) and broadband plans, respectively.
Besides the competition, the reason for Airtel to introduce the entry-level tariff of Rs 599 can be attributed to the fact that for a family of two, it is not cost effective to choose the current Rs 999 postpaid plan, which supports four SIM cards. With the new plan, each connection will cost Rs 300 with 105 GB total data.
In comparison, Jio’s Rs 399 plan, where the total outflow for a family of four comes to Rs 696 (Rs 174 per connection) is at a discount to peers, but lacks in value as it does not give any OTT offering. On the other hand, Vodafone Idea’s entry-level family postpaid plan starts at Rs 699, which supports one additional SIM card bundled with OTT apps.
According to analysts, the only difference between the postpaid offerings is the additional benefits like OTT apps. “If Jio has reduced the tariffs, then it has also removed the bundled partner OTT (Netflix, Amazon, etc) in its postpaid plans,” a Mumbai-based analyst said, adding that the plans will not change anything with regard to average revenue per user (Arpu).
On March 15, FE, citing sources, reported that Bharti Airtel will also come with some new plans which would encourage prepaid users to move to postpaid plans.
“Certainly, postpaid can help increase Arpus and telcos would naturally want more consumers on postpaid. However, the impact is unlikely to be significant. Users tend to prefer prepaid since it helps them budget and save them from bill shocks,” said Mahesh Uppal, director at ComFirst (India), a telecom policy consulting organisation.
The postpaid market accounts for 7.5% of India’s overall subscriber and 10% of the telecom sector’s wireless revenues, according to industry estimates. For Airtel, around 6% of its 332 million user base are on postpaid, whereas for Jio, it is about 5% of 430 million subscribers for and for Vodafone Idea, about 10% of its 228 million subscribers.
“We believe this move would lower the barrier for users to move to postpaid as the total monthly outgo compared to regular family plan will come down (although with lesser benefits), security deposit will be waived and additional benefits on roaming, etc, would be provided,” CLSA had said at the time when Jio launched its new postpaid family plans. “Given that the postpaid segment is sticky, customer base with lower churn, we think the benefits of this move will only accrue gradually over time,” the brokerage said.
Last week, Bharti allowed all its postpaid users and those with prepaid plans of Rs 239 and more, unlimited access to 5G data. Industry watchers noted that it was working to prevent its subscriber base from switching over to Jio, which has been offering unlimited 5G data over 4G plans and also introduced new postpaid offers.
