Good times for mobile phone users will continue for another year for sure.
At least till the time the disrupter – India's richest businessman – Mukesh Ambani entered the telecom market and shook up the rivals attains his target of 400 million user base.
Early entrants Ambani's Jio has challenged – Airtel, Vodafone and Idea -- are still reeling under the aggressive price war unleashed by the new kid on the telecom bloc.
The telecom companies may be crying hoarse over what they term "unfair" means of Reliance Jio, for the customers, it is raining 'freebies' and a drastic fall in telephone bills. Over the last five years, the call rates have fallen to 16 paise for a minute, all thanks to Ambani's predatory move in the sector that cashes in on the penchant of the Indian – to talk more and more.
The bonanza for the telephone services users is likely to continue for another year or so till the time Reliance Jio touches its target of 400 million, market analysts expect. After that, the opposition would have been considerably weakened for the Reliance Jio to revise its tariff plans, market analysts predict.
Ever since Reliance Jio exploded onto the Indian market, with free calls and data plans, in September 2016, the opponents were forced to drop their call rates to around one third of what they were till that time to 16 paise per minute, according to data released by the Telecom Regulatory Authority of India (TRAI).
Consider this: The per minute voice tariffs ranged between 48 paise and 51 paise till September 2016 and continuously fell with each passing month. The call rate dropped to 44 paise per minute in December 2016 and then to 31 paise in March 2017. Subsequently, the price dropped to 27 paise in June 2017, 23 paise in September 2017, 19 paise in December 2017 and reached 16 paise per minute in March 2018, as per TRAI data.
The freebies given by Reliance Jio only got more and more users hooked to its network and also lead to an increase in average voice call time usage by customers over the past couple of years. If it was an average voice consumption of 349 minutes per month per subscriber in March 2018, it shot up to 584 minutes per user per month.
Industry analysts said the freebies of Reliance Jio forced other telecom operators to bring down tariffs and come up with new schemes to counter the disrupter. But, going by the call drops experienced by the telecom operators other than Reliance Jio, clearly, they are under pressure and unable to handle the technical requirements. More often, customers of services other than Reliance Jio suffer from call drops and poor connectivity issues.
So much is the pressure on the financial front for firms other than Reliance that second-largest telecom company, Vodafone, has merged with the third largest company -- Idea.
Vodafone has posted quarterly losses for the sixth consecutive quarter.
After voice, the competition will be for data services. Reliance is also about to disrupt the home broadband market now. Airtel is bracing for a price war again on this front – the result will, of course, be another bonanza for the customers. Trust Reliance Jio to come up with unlimited voice calls, videos and internet surfing at high speeds all at a price range of Rs 1000 to Rs 1500 per month.
Airtel may also come up with its own offers for mobile, DTH and broadband users. All this has brought Airtel under pressure and has had its revenues contracting by nearly 11 per cent to Rs 604.2 crore in the quarter ended March.
