Price war cools as Jio raises prices; operators seek vendor tie-ups to convert 2G users

23 Oct 2017

Reliance Jio Infocomm (Jio), the Indian wireless market’s newest operator, has begun to increase the effective prices of many of its 4G plans, signalling a potential end to the price war initiated by the disruptive entrant in September last year. The Economic Times writes that the cellco is beginning to look towards customer retention over customer acquisition by increasing the allowances on its low-end tariffs – such as its INR149 (USD2.3) per month plan, which was increased from 2GB to 4GB – and lowering the validity of its other offerings. Its INR399 plan, for example, was reduced to a 70-day validity from its previous 84 days. The shift in approach will provide some breathing room for the nation’s incumbent operators, which have been under pressure to match the newcomer’s aggressively-priced tariffs.

The development followed on the heels of Jio’s end-September financial results, with the cellco reporting a net loss of INR2.7 billion for the three months to 30 September 2017. Turnover for the quarter was INR61.5 billion, meanwhile. Jio surprised industry observers with an ARPU of INR156 from its nearly 140 million subscribers, ahead of the INR154 reported by market leader Bharti Airtel for the period ended 30 June 2017.

In a related development, the Business Standard writes that operators are looking to secure tie-ups with device manufacturers as part of efforts to convert the country’s more than 500 million 2G subscribers to 4G. Airtel has partnered with local handset maker Karbonn to offer a smartphone for an ‘effective price’ of INR1,399, whilst Jio introduced its own Jio-branded feature phone in July this year, priced at INR1,500. For their part, Vodafone and Idea Cellular have also confirmed that they are in talks with vendors for similar partnerships, but no further details are available.