It was understood that the entry of Reliance Jio would shake up India’s mobile telecom market. Mukesh Ambani did quite that by offering free voice and roaming within India along with faster data on the 4G platform. It did shake up the market as the investor wealth of R13,000 crore was wiped out from the stock market on Thursday last week, when the announcement was made.
So does the consumer gain? Let’s look at three types of users — the low-end, the mid-level and the high-end, and see how they gain or lose out by the schemes offered by Jio. The cheapest plan from Jio is the R149 one that offers 300MB of data downloads over 28 days with 100 free SMSes. The free SMSes are nothing new. Most operators offer various variants of free SMS. But, the catch is that the 300MB could well end up being too low.
The best start-up plan for a new prepaid Jio user is the Rs 499 one that offers 4GB over 28 days, or 1GB every week. That should be the most attractive plan as far as new users are concerned as it lowers the entry cost for a data plan substantially. If your current monthly bill is in the region of Rs 500, it’s a good one to opt for.
Going by Jio tariff plans, the low-end user will be on the R499 plan and gets 48GB of data downloads a year entailing an annual payout of Rs 5,988. In comparison, Airtel has a 1GB offer for prepaid users which involves an upfront payout of Rs 1,498 followed by data recharges of Rs 51 after the first 28 days. That’s quite expensive to start out with for prepaid users who prefer cheap recharges. But, 47 recharges of Rs 51 works out to Rs 3,895, which on an annualised basis is less than what Jio is offering.
Vodafone has a Rs 499 offer with 1GB download and 700 minutes of free voice. Though this is a positive for Airtel, it remains to be seen how many are willing to pay the starting fee. In case Airtel lowers rates by the time Jio starts services, it could be an interesting space to watch.
Jio offers 10GB for 28 days on a Rs 999 plan. That’s an annual bill of Rs 12,987. On Airtel’s Rs 1,498 plan, the user will need to recharge 119 times for Rs 51 each time to match the Jio data offering. That works out to Rs 7,567, but has the hassle of recharging regularly. But, on the postpaid plan, the Airtel user loses out as it offers only 1GB for Rs 1,199. Clearly, an area of concern for Airtel. Meanwhile, Vodafone offers 3GB and 2,000 minutes of free calling on its Rs 999 plan.
Heavy data users
For compulsive mobile data users, Jio is by all means a much better option for postpaid subscribers since it offers 35GB of data at Rs 2,499 — or Rs 71.4/GB. In comparison, Airtel charges Rs 2,999 and offers only 20 GB. Vodafone offers 8GB of data an free voice for Rs 1,999. Considering that both offer free voice and roaming in India the Jio offer is any day more attractive.
While the Jio offering could take the wind out of existing operators, things will be clearer and competitive by the time the Jio plans are effective January 1, 2017. Till then, it’s good to wait and watch. After all, the Indian consumer is open to waiting for three months if a better deal is on offer.