Jio’s entry can lead to tariff war, but Airtel battle-ready, says MD Gopal Vittal

By May 9th, 2016 AT 6:36 PM

Bharti Airtel’s managing director of India and South Asia, Gopal Vittal, said that the entry of Reliance Jio, Mukesh Ambani’s telecom venture, could shake up the Indian telecom market, and has the potential to kick-off a tariff war.

airtel-gopal-vittal

“We have seen brutal tariff wars over the last 20 years. Today our tariffs are 33-34 paise on voice per minute, which I think is unsustainable. A new entrant coming in with a lot more capacity surely there could be pressure on tariffs,” Vittal was quoted as saying by the Economic Times.

However, Vittal expects Jio to compete with a more rational pricing strategy, given that the Mukesh Ambani Company seeks returns for its shareholders and investments.

Vittal however made it clear that Airtel would focus on holding on to its ARPUs (average revenue per user) in case Jio brings low data and voice tariffs to garner quick market share.

“One strategy could be to throw in a lot more goodies, as we have the capacity (free bandwidth) but still try and maintain the ARPU. Realisation will go down because people will consume more data without headline tariffs coming down. So, the decisive factor is then an operator’s capacity. We have to play our game….We are ready. We are battle-scarred and battle-ready,” he said.

Reliance Jio has recently extended the trial launch of its 4G services to the public through an invite system, driven by its group employees.

The 4G operator recently revealed that its services were being tested by over 500,000 users, many of whom use LYF phones. The telco had said that it will launch full scale commercial operations once the base increases to a few million users, which his widely estimated to be towards the end of this year.

Do you think Jio can offer a killer pricing do let us know via comments.

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

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Raktim Dutta
Raktim Dutta

Nice! Keep up your looting strategy before Jio’s entry.

Your data plan Rs. 101 which is turned into a 2G plan with 250 MB is now my favorite one! Nice airtel nice… I appreciate your data pricing.

Sunny
Sunny

They only cater to high end, elite customers. They don’t give a rat’s a$$ to low revenue users. If you look at their ads, you’d only see rich urban type of people, not common man. Hope JIO does well and forces these people to rethink their strategy.

Surya
Surya

They are also featuring some extremely unlikely Airtel 4G users nowadays in their ads, goes to show that they are yet to get bitten by reality….#GoRelianceJio…

Sunny
Sunny

Haha true. Airtel and Vodafone are probably the most high society. Even the English speaking grandma is flying abroad in the new VF ad. Idea not that much elitist but prices are similar. Now Airtel is trying to touch the common people with a stick but common people are so dirty and poor y’know, they must be like “chhi chhi bhikhari kahin ke 250-300 mein 3G-4G afford nahi kar sakte these low class beggar Indian people??? Why isn’t everyone rich like us” LOL.

Kiran Fernandes
Kiran Fernandes

These LYF phone selling coupled with invites will make them get back some share of the market sooner, so the smart guys like us will get better tariffs in the coming months when they perform the full fledged launch.
Airtel will not quit the telecom market because of their project leap shit, but they will be hit HARD! I mean, really HARD! Right in the KOKORO!

Sunny
Sunny

Invite milega to kya bolega smart guy? Lol.

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