India’s largest mobile operator Bharti Airtel has said the new tariff announced by Reliance Jio is very aggressive and unsustainable, and the industry will respond to it with more competitive plans and additional data offerings.
Airtel had on Monday waived roaming charges to compete with free voice calls and roaming offered by Jio. The Mukesh Ambani-controlled company has not only promised to match the best mobile data usage plan in the market but add 20 percent more data to it.
“Tariffs that they (Jio) have announced are still very aggressive, which means you got to respond. You got to do more packages… you have to throw in more data. All those things need to be done,” Bharti Airtel Chairman Sunil Mittal told reporters in Barcelona.
Jio, which has spent $25 billion (roughly Rs. 1,66,840 crores) on its 4G wireless data network, will terminate free data plans from April 1 but has offered customers the option of signing up for a Jio Prime membership for Rs. 99 to continue using unlimited services for a year by paying Rs. 303 every month.
In a free-wheeling chat on the sidelines of the Mobile World Congress, Mittal, who is also the Chairman of global industry body GSMA, strongly advocated consolidation for the Indian telecom industry to “get the economic case back”, pitched for affordability in spectrum pricing that has gone “out of control” in the last few years, and said the spectrum surplus industry will not need an airwave auction, at least in 2017-18.
The Indian telecom czar said Bharti Airtel’s balance sheet remains “healthy and strong”, and that he does not think Bharti will go into losses under competitive pressure although one can “never say never”.
Mittal categorically ruled out an exit from Africa operations, but said Bharti will explore merger and consolidation in certain African markets where it is not amongst the top two players.
Admitting that Jio’s decision to start charging customers from April 1 was “good news” for operators, he said it however, would not signal the end to tariff war.
“First of all, good news is that eventually they have announced that they will charge from April 1. But yes, still to our mind, it is the pricing which is unsustainable. 1GB a day (of data) for that price is pretty low. It is better than zero (free services),” he said.
Bharti Airtel had reported over 54 percent fall in net profit to Rs. 503.7 crores for October-December quarter of 2016 due to what it had at the time termed “turbulence” from “predatory pricing by a new operator”.
Asked how long will his company continue to feel the impact of Jio on its earnings, Mittal said that overall, he expected that by March 2018, the “dust will settle down” for the entire industry.