Telcos slash 3G tariffs due to sagging demand

Telecom companies have slashed 3G (third generation) tariffs due to sagging demand in the segment and the threat of Reliance Industries Ltd introducing 4G (fourth generation) services looming large.

Bharti Airtel , which charged Rs 999 for 5 GB and Rs 1,199 for 8 GB is offering these plans at Rs 850 and Rs 950 respectively along with unlimited data usage . After exhausting the free 3G data limit, subscribers will also get unlimited 2G download speed at 80 kbps as part of the bundle. 3G speed is up to 2 MBPS.

Despite having cut 3G tariffs by up to 70 per cent last May, companies were unable to add adequate subscribers. However, they have gradually reduced 3G tariffs by 10-15 per cent in few highend tariff plans, which has helped them to add more 3G subscribers. Interestingly, leading players like Airtel and Vodafone India have also tied up with branded handset makers to bundle new smartphones with a free three-month 3G trial package.

"We are also targeting our subscribers who use 2G Internet packs. If they have a 3G-compatible handset, we recommend that they switch to 3G for much higher speed. We even offer them a 3G trial pack of 150-200 MB free of cost for two or three months," said an official of a leading telecom company.

"A large part of the 3G frequency remains unused. We are diverting it for voice calls as well. We are aggressively marketing 3G and are heavily dependent on it," the official added.

Although firms invested huge amounts in getting 3G spectrum in 2010, their consumer base still continues to be only a fraction of 2G data consumers. Airtel has 43.49 million mobile Internet 2G connections but only 1.2 million 3G customers.

With Mukesh Ambani's Reliance Jio Infocomm (RJI) planning to start 4G services offering both data and voice services soon, things could get more difficult for 3G players. Currently, only Airtel has started rolling out 4G services in a few cities. Most companies are banking heavily on 3G. While Aircel aims to have 50 per cent revenues from 2G and 3G data services by 2015, Vodafone is looking at developing a pan-India 3G network by expanding its operations from nine circles to 22.

Courtesy: Mail Today