1. Reliance Jio Phone vs Airtel Karbonn phone: Bharti joins RJio in high VoLTE campaign; how customer benefits

Reliance Jio Phone vs Airtel Karbonn phone: Bharti joins RJio in high VoLTE campaign; how customer benefits

Given the vastly superior data compression and faster speeds that 4G networks offer in comparison to the older 2G/3G ones, both telcos and subscribers benefit from moving to it.

By: | Updated: October 12, 2017 8:07 PM
airtel new plan, airtel new offer, reliance jio airtel So, if India wants to move to the pay-for-data-voice-free model, it is only possible on VoLTE networks. (Reuters)

Given the vastly superior data compression and faster speeds that 4G networks offer in comparison to the older 2G/3G ones, both telcos and subscribers benefit from moving to it. If you take just Bharti, Vodafone, Idea and RJio, based on their current spectrum holdings and network configuration, they have a data capacity of 46 billion GB a year on their 4G networks. Even if you assume a 10 GB usage per user per month, or around 5 times that on incumbent networks in the June quarter – RJio reports that kind of data usage right now – the industry’s 200 million data subscribers use around half this capacity; the voice calls on such networks, VoLTE in jargon, use a tiny fraction of that. So, if India wants to move to the pay-for-data-voice-free model, it is only possible on VoLTE networks. Sure, telcos can offer cheaper data packages on 2G/3G networks, but their capacity is much smaller.

The problem with this, however, was that 4G/VoLTE phones were just too expensive, at around Rs 4,000-4,500 at the lower end of smart-phones. This is where RJio came in and disrupted the market with an ‘effectively free’ 4G feature phone. So, customers would pay Rs 1,400 for the phone – there is a subsidy on each phone but RJio has not confirmed this – but get this amount back after using the phone for three years; they must, to avail the service, subscribe to a Rs 153 per month tariff plan. Effectively, then, the cost of the phone is really the interest cost on Rs 1,400 for three years, so if RJio is to offer a financing scheme, the upfront costs could further crash. As for the Rs 153, analysis by Kotak Institutional Equities shows that while there are 200 mn customers who, on average, spend over Rs 279 per month, there are another 200 mn who spend an average of Rs 140 – this is what RJio is aiming at.

The battle has got more interesting with Bharti Airtel joining the battle with a bundled offer on a VoLTE smartphone made by Karbonn. While the phone costs Rs 2,899 if bought with an Airtel connection – it costs more otherwise – customers get Rs 500 after 18 months and another Rs 1,000 after 36 months. Airtel’s monthly subscription is Rs 169 – like RJio, it offers 0.5GB/day of data and unlimited local/national voice, but it charges for SMS unlike RJio. On the plus side, the phone is a smart-phone not a feature phone, it can work on 2G/3G/4G networks versus just 4G for RJio, it has a bigger screen, more RAM and memory, it is not locked to Airtel, it is an open system so any apps can be downloaded from the Play Store and customers don’t have to return the phone after three years. India’s telecom battle just got a lot more interesting and, with 4G/VoLTE phones a lot more affordable, the data revolution just got a big boost.

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