The initial launch of 3G services by two private telecom operators ? Tata Docomo and Reliance Communications (RCom) ? signal that service providers are unlikely to enter into a tariff war in 3G services as they had resorted to while offering 2G, analysts say.
?Any fears of irrational pricing for 3G services appear unfounded as can be gauged by RCom\’s pricing across plans. RCom plans are costlier than Tata Docomo for lower usage but costs reduce with usage above 1 GB data,? said Harit Shah, an analyst with Karvy Broking.
Companies like Bharti Airtel, Vodafone Essar, Tata Teleservices, RCom, Idea Cellular and Aircel, among others, paid a whopping Rs 68,000 crore for 3G licences, auctions for which happened in May. ?Tariff war in 2G has abated. For 3G, we do not fear a tariff war because it will be only 3-4 players in a circle. Competition for 3G will be on the content, innovation and quality of service front,? said Syed Safawi, CEO, wireless business, RCom.
For instance, a 1 GB 3G data plan from MTNL and BSNL costs about Rs 450 and Rs 352 and the same plan with Tata and RCom would cost Rs 1,000 and Rs 649, respectively.
Also, while MTNL and BSNL have tried to promote video calling as a part of their 3G offerings, the Tatas have tried to woo subscribers to their applications which they have developed in partnership with NTT Docomo. RCom, which recently launched its 3G services in four states, is betting big on its mobile TV offerings, wherein a channel can be viewed at a charge of Rs 10 per day.
For usage below 1 GB, RCom\’s plans are more expensive than the Tatas. For example, for RCom\’s pre-paid data plan for 1 GB, the cost is Rs 649, implying a cost of 65 paise per MB, while for the 750 MB plan for Tata, the cost is Rs 351, implying a cost of 47 paise per MB. However, for RCom\’s 3 GB plan, the cost is Rs 899, thus implying a cost per MB of 30 paise as compared with a Rs 751 cost for the 2 GB plan of Tata, implying a per MB cost of 38 paise.
Vodafone and Bharti Airtel said that they would be launching 3G services by early next year and have also hinted that their users who would like to avail 3G services will have to pay a premium. When asked if Vodafone is concerned about tariff war in 3G services in an earlier interaction, Samaresh Parida, director-strategy, Vodafone Essar, said, ?Not more than in 2G. We do expect data pricing to definitely go down. How we will position our data services is a commercial decision and will be taken based on \’who is offering what\’.
