Anil Ambani-led Reliance Communications (RCOM) unleashed a tariff war in the 3G data segment on Thursday as the company slashed monthly tariff by 50%, offering high-speed mobile internet at half the price of competitors like BhartiAirtel, Vodafone and Idea Cellular. The move by the country's third-biggest mobile operator comes a few weeks after its rivals lowered 2G and 3G rates, but only for data usage beyond standard package limits.
Data adoption in India has been slow, but is expected to grow exponentially in the coming years as sales of mobile devices like smartphones and tablets boom with users consuming more online content.
RCOM has reduced the monthly tariff for 1GB data on 3G to Rs 123 from Rs 250. This is even cheaper than the company's 2G monthly tariff that of Rs 125. "We want a data tsunami and want to liberate customers from high prices and slow speed," RCOM president and CEO (wireless) Gurdeep Singh said.
When contacted, most of the other companies refused to comment. However, industry analysts say that a price cut may not be far away as companies are scouting for heavy data users.
3G adoption in India has been slow as high prices and not-so-efficient services have kept users away. Only about 5% of the country's 850 million mobile users have subscribed to 3G services, which are estimated to account for 3% of mobile revenue of telecom carriers. Companies are also fighting hard in the data space as voice tariffs - one of the lowest in the world - have remained more-or-less muted over the last many months and operators have rather done away with freebies and discounts here to shore up revenues.
Airtel, Vodafone and Idea had last month cut the prices of their internet data plans, but the lower rates were valid only beyond the stipulated standard package prices. Currently, Vodafone charges Rs 250 monthly for 1GB data package of 3G and Idea and Bharti also offer a near-similar plan. Their reductions had come for data usage beyond the 1GB limit.
Jaideep Ghosh, who tracks the telecom sector at KPMG, said operators will increasingly offer lucrative data plans to latch on to the rapidly-increasing users of smart phones and tablets.