New Delhi:The honeymoon for telecom subscribers seems to have come to an end as all the three private telecom players Vodafone Idea, Bharti Airtel and Jio on Sunday announced pre-paid tariff plans with 40-50 per cent higher rates.
The hike comes after three years and amid the acute financial stress, the sector is going through after a Supreme Court ruling on adjusted gross revenue. The hikes, however, come with enhanced data and other benefits.
There have been major slab changes and introduction of new plans with higher amounts in the hikes announced on Sunday which will have direct impact on low end consumers. Now the minimum recharge is Rs 49 from the earlier Rs 35. There will also be an additional 6 paise minimum charge after a limit as per Fair Usage Policy on calls made to a different network.
Reaction on pre-paid tariff plans Reliance Jio, the last one to announce a revised rate on Sunday, said it would raise tariffs by up to 40 per cent. "Jio will be introducing new 'all-in-one' plans with unlimited voice and data. These plans will have a fair usage policy for calls to other mobile networks. The new plans will be effective from December 6," Jio said.
"The new 'all-in-one' plans will be priced up to 40 per cent higher, staying true to its promise of being 'customer-first', Jio customers will get up to 300 per cent more benefits," it said.
Airtel's new rates will be effective from December 3. After December 3, the Rs 129 pack for 28 days with unlimited calling, 300 SMS, and 2GB data would cost Rs 148, it said.
A major hike is witnessed in Airtel's Rs 998 plan with 336-day validity, unlimited calling, 3,600 SMSs and 12GB data. It would be replaced by a Rs 1,498 plan, marking 50 per cent rise, with 24GB data and 365-day validity.
The users of Rs 1,699 plan would have to pay Rs 2,398, which is an increase of 41 per cent. It would continue to offer unlimited calling, 100 SMS and 1.5GB data per day.
Airtel had merged Rs 169 and Rs 199 plans for 28 days to offer a Rs 248 plan with same benefits unlimited calling, 100 SMS and 1.5GB data a day.
Read more:Bharti Airtel to raise mobile calls, data charges by up to 42 pc from Dec 3
The Rs 249 plan, which offered unlimited calls, 100 SMS and 2GB data a day, would now cost Rs 298. The Rs 448 and 499 plans for 82 days would now cost Rs 598 and Rs 698 for 84 days.
"Airtel's new plans represent tariff increases in the range of 50 paise a day to Rs 2.85 a day and offer generous data and calling benefits. Airtel also provides exclusive benefits as part of the Airtel Thanks platform, which enables access to premium content from Airtel Xstream (10,000 movies, exclusive shows and 400 TV channels), Wynk Music, device protection, anti-virus protection and much more," it said.
The revised Vodafone Idea tariffs too would come into effect from December 3. It has launched 'First Recharge Packs' where the four first recharge packs will cost Rs 97 with Rs 45 talk time, 100MB data and voice calls charged at 1 paisa per second along with 28 days validity. Other plans include Rs 197, Rs 297 and Rs 647. They offer up to 1.5GB data a day and unlimited 'on-net' calling for 84 days.
Vodafone Idea announced that the 'on-net' voice calls would be billed at 6 paise per minute. The 'on-net' voice calls after the provided FUP limit will be charged 6 paise per minute, similar to Reliance Jio. It is also providing bundled 'on-net' minutes, whereas Jio will be charging customers for IUC 'top-up' vouchers.
In unlimited packs with 28-day validity are Rs 149 plan with unlimited voice (FUP of 1,000 minutes for off-net calls), 2GB data, 300 SMS; Rs 249 plan with unlimited voice (FUP of 1,000 minutes for off-net calls), 1.5GB data, 100 SMS per day.
The company has removed the All Rounder packs and introduced two Combo Vouchers of Rs 49 and Rs 79 with 28-day validity. It has announced new prepaid plans with 2 days, 28 days, 84 days, 365 days validity, and broadly compared with existing plans of similar nature. However, new plans are costlier up to 42 per cent.
Vodafone Idea had earlier said it would increase tariff in December. The announcement has come in the backdrop of its highest quarterly loss of Rs 50,922 crore.
It's now expected that the state-run BSNL could also hike tariffs. The government and the Telecom Regulatory Authority of India (TRAI) have made it clear that there will be no floor rate for voice or data and the telcos would have to thrash out pricing among themselves to cover up losses.
Financial services firm India Infoline said it is time consumers pay up more for data usage and with the usage of data penetrating into lives like basic staple, its usage wont be reduced even with higher bills by the consumers.
Some analysts also do feel voice calls will be impacted and app-based calling will be used more to lessen the mobile bill.
Bhagyashree C. Bhati, Research Analyst at CARE Ratings told IANS: "To an extent it will have an impact. If three telcos have raised the tariffs, obviously it will have an impact and consumers will pay more but terms of data usage will have no impact out of this hike. But with respect to calls there will be problems but data consumption will not be affected in any manner. I see people making more WhatsApp calls or app based calls more due to the hikes."
Bank of America and Merril Lynch said it does not expect major negative elasticity.
"As all telcos are looking to raise tariffs at almost same magnitude, we do not see any negative elasticity impact. In the past we saw negative elasticity as consumers had option to switch to other telcos. Besides, before Jio launch consumers were paying average of Rs 180-200/month which has gone down to Rs 120/month.
"Closest analogy of telco tariff hike could perhaps be fuel price increase - where we see a month or two of low demand before usage picks up again. We expect more tariff hikes to follow and remain bullish. We consider Bharti and RIL as better telco names that benefit from tariff hikes and remain bullish. While VIL may show maximum upside, the overhang from the AGR issue does not make its risk-reward favourable", it said in a note.
