Reliance Jio 4G Plan Tariffs – How disruptive would it be for Airtel & Idea?

by Shiv Kukreja on September 2, 2016

in Uncategorized

Reliance Industries today announced the tariffs of its 4G services during its Annual General Meeting (AGM) in Mumbai. The services, which are to be carried out in the name of Reliance Jio, would be commercially launched on September 5th. Whatever got announced today during this AGM with respect to Reliance Jio, its tariffs and the company’s plans to carry out its operations was extremely exciting for the Indian consumers.

But, it was a very bad day as far as the stock prices of Airtel, Idea, Reliance Communications and even Reliance Industries itself are concerned. Idea stock suffered the most of the brunt and closed down 10.49% at Rs. 83.65. Anil Ambani’s Reliance Communications was next in line with a fall of 8.99% at Rs. 49.10. While Bharti Airtel, the largest telecom service provider in India, suffered 6.27% fall in its share price to Rs. 310.85, Reliance itself got hammered by 2.91% to close the day at Rs. 1029.20.

So, what made these big companies fall so much in a single day of trading? The answer is – all Reliance Jio services, including voice calling, 4G data usage, SMS services etc. will be absolutely free for all its subscribers for almost four months before they get paid w.e.f. January 1, 2017. Even when these services become paid from January 1, voice calling would remain free across all its plans and there would be disruptive 4G tariffs, which are termed by Mukesh Ambani as the World’s cheapest data tariffs at Rs. 50 per GB of data.

Reliance Jio’s tariffs are termed as disruptive and on the face of it they are truly intimidating for the incumbent telecom players. So, what are the Reliance Jio 4G plan tariffs which have made the existing players to rework their future strategies? Here you have the tariffs the consumers will have to pay to avail Reliance Jio services:

Postpaid Tariff Plans

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Prepaid Tariff Plans

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Base plan of Rs. 149

A consumer will get:

1) 300 MB 4G data

2) Free Unlimited local/ISD voice calls

3) Free Jio app subscription worth Rs. 1,250

4) Free 100 local/STD SMS

Effective cost per GB of data – Rs. 508

Rs. 499 Pack

A consumer will get:

1) 4 GB 4G data + Unlimited 4G data during night

2) Free Unlimited local/ISD voice calls

3) Free Jio app subscription worth Rs. 1,250

4) Free unlimited local/STD SMS

5) 8 GB JioNet WiFi Hotspot access

Effective cost per GB of data – Rs. 124.75

Rs. 999 Pack

A consumer will get:

1) 10 GB 4G data + Unlimited 4G data during night

2) Free Unlimited local/ISD voice calls

3) Free Jio app subscription worth Rs. 1,250

4) Free unlimited local/STD SMS

5) 20 GB JioNet WiFi Hotspot access

Effective cost per GB of data – Rs. 99.9

Rs. 1,499 Pack

A consumer will get:

1) 20 GB 4G data + Unlimited 4G data during night

2) Free Unlimited local/ISD voice calls

3) Free Jio app subscription worth Rs. 1,250

4) Free unlimited local/STD SMS

5) 40 GB JioNet WiFi Hotspot access

Effective cost per GB of data – Rs. 75

Rs. 2,499 Pack

A consumer will get:

1) 35 GB 4G data + Unlimited 4G data during night

2) Free Unlimited local/ISD voice calls

3) Free Jio app subscription worth Rs. 1,250

4) Free unlimited local/STD SMS

5) 70 GB JioNet WiFi Hotspot access

Effective cost per GB of data – Rs. 71.4

Rs. 3,999 Pack

A consumer will get:

1) 60 GB 4G data + Unlimited 4G data during night

2) Free Unlimited local/ISD voice calls

3) Free Jio app subscription worth Rs. 1,250

4) Free unlimited local/STD SMS

5) 120 GB JioNet WiFi Hotspot access

Effective cost per GB of data – Rs. 66.65

Rs. 4,999 Pack

A consumer will get:

1) 75 GB 4G data + Unlimited 4G data during night

2) Free Unlimited local/ISD voice calls

3) Free Jio app subscription worth Rs. 1,250

4) Free unlimited local/STD SMS

5) 150 GB JioNet WiFi Hotspot access

Effective cost per GB of data – Rs. 66.65

Is it really disruptive and will it affect you?

I think an average Indian telecom consumer does not want to spend more than Rs. 300 for its monthly voice calling and data usage. Airtel reported its average revenue per user (ARPU) to be Rs. 196 during its first quarter results in July 2016. As against Rs. 50/GB of data as announced by Jio, the cheapest Rs. 149 data pack would effectively cost you Rs. 508 per GB of data, but also provides you free unlimited voice calling.

As you can check from the plans above, even a Rs. 4,999 plan does not bring down cost per GB of data to Rs. 50. So, tariffs here are presented in a manner which sound music to your ears, but eventually they could end up higher. Incumbent players Airtel, Idea, Vodafone and RCom have sufficient time to act or react to these tariffs. Whether these tariffs would add to the overall growth of the telecom sector or to the woes of its existing players, that is something only time will tell. But, one thing is certain, the consumers here in India are going to enjoy some highly competitive data tariffs in the months to come.

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