Opening salvo of new price war as Bharti, RCOM cut data costs

28 Nov 2014

Bharti Airtel and Reliance Communications (RCOM) have launched ‘disruptive’ data plans, heralding what the Economic Times says may be the start of another ‘tariff war’, referring to an earlier price war in 2009-2011 which saw prices fall unsustainably low as operators sought subscriber growth over profit margins. The first shots were fired by Bharti Airtel, which said it would price 4G services at or below the cost for 3G services, whilst RCOM followed up with its own offer, promising unlimited downloads for INR999 (USD16.2) per month. RCOM’s chief executive for consumer business was quoted as saying that the new plan aims to steal data subscribers who are ‘dissatisfied with their current data speeds or the quality of indoor coverage,’ from the company’s rivals. The paper also suggests that RCOM’s plan is a direct challenge to an INR999 plan launched by Russian-backed Sistema Shyam TeleServices (SSTL) which caps downloads at 40GB for post-paid users and 20GB for pre-paid customers. It has also been speculated that the nation’s cellcos are keen to snap up potential data subscribers before Reliance Jio Infocomm (RJIL) launches its 4G network next year.