In a fresh twist to the telecom tariff war, market leader Reliance Jio has retained its ₹299 entry-level plan even as rival Bharti Airtel discontinued its similar-priced base plan of 28-day validity.
Reliance Jio is also offering its users protection against any tariff hike for the next one year at a one-time charge of ₹300 through the Jio Prime membership programme, according to company executives. This means Jio Prime users can continue recharging on their existing recharge plans until 5 September 2027, irrespective of any tariff hike.
The prime membership programme is for Jio's existing and new users and includes priority customer support, early access to its products, services and trials, as well as ₹300 cashback voucher for Jio Home or Jio PC connections.
The changes are expected to reflect on Jio’s website and apps soon, the executives said.
The development comes ahead of the festive season, when operators typically seek to avoid sharp increases in mobile tariffs. In February 2017, Reliance Jio introduced its ₹99 Prime membership after crossing 100 million subscribers. The membership gave users continued access to promotional offers such as 1GB of data per day along with unlimited voice calls for a year, through a monthly plan starting at ₹303.
“Jio has always maintained that its tariffs remain lower than peers. At a time when it is near its IPO (initial public offering), any move to not increase the tariffs currently and give add-on offers should be seen as a way to gain market share,” said Kranthi Bathini, director of equity strategy at WealthMills Securities, a Sebi-registered securities broking company.
The move from Reliance Jio, whose tariffs already trade at a discount to peers, could affect Airtel’s strategy to upgrade base-level plan users to higher tariffs.
Queries emailed to Reliance Jio late Monday did not elicit any response.
Last week, the Sunil Bharti Mittal-led company discontinued its ₹299 plan (1GB a day for 28 days). This move effectively forces subscribers into its ₹349 plan to maintain daily data—a 16.7% or ₹50 cost increase. The ₹349 pack offers 1.5GB of daily data and unlimited 5G for 28 days, according to the company's website.
Currently, Jio offers a ₹299 plan with 28-day validity and 1.5GB per day data. The Reliance Industries arm also offers a pro plan for Google Gemini with 5,000GB of cloud storage and is now adding Jio Hotstar to the package, company executives said.
However, according to analysts, any such impact will be clear after a quarter at least. “It is too premature to comment if Airtel will be impacted in case competitors do not tweak their base tariffs. But after a quarter, it will be clear whether Airtel’s users ported out or it has increased its Arpu,” Bathini said.
The pricing divergence now puts the spotlight on Vodafone Idea, which offers its ₹299 pack with 1GB of daily data for 28 days, according to its website. If it also refuses to upgrade its price plan then some of Airtel’s subscribers may move to the third private player, according to analysts.
“If Vi (Vodafone Idea) follows Bharti’s tweaks, it could also see ₹4 Arpu upgrade for FY27 (four months of benefit; 1Q Arpu of ₹177). However, Vi may choose not to follow Bharti and instead use this window as an opportunity to migrate more subscribers from secondary SIMs to primary SIMs,” analysts at brokerage house IIFL Securities said in a note dated 12 August.
To be sure, Vodafone Idea gained users in the June quarter – its first quarter of additions after merger between Vodafone India and Idea Cellular in August 2018.
Analysts estimate a headline tariff hike from telecom operators in December to improve their average revenue per user (Arpu).
Morgan Stanley analysts, in a note dated 12 August, said Airtel's move could boost the operator’s Arpu by ₹8-12 on a gross basis.
Bharti Airtel’s Arpu was ₹264 a month at the end of the June quarter. In comparison, Vodafone Idea’s Arpu was ₹177, market leader Reliance Jio’s was ₹215.8. In March, Bharti Airtel chairman Mittal said he remained hopeful that the company would get to ₹300 Arpu, with an ultimate goal of ₹350.
As of June-end, Jio had 533 million subscribers, including 285 million 5G users. Airtel’s subscribers in India were at 492 million, including 376.5 million mobile subscribers. Vodafone Idea had 193.1 million subscriber base at the end of June.