Slashing 2G Data is A Useless Move by Incumbent Players

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We all know that Indian telecom is dull these days, and out of sudden mobile operators start slashing 2G data tariff. If you check carefully this move comes from incumbent telcos – Airtel, Vodafone and Idea, and later by Tata Docomo also. Though cutting down data tariff whether on 2G or 3G is good for data growth, while voice tariff is increasing slowly this move seems to be just another marketing gimmick to pass the impression that data getting cheaper.

All the three incumbent players and Tata Docomo, they revised the tariff from 10paisa per 10 kB to 1 or 2 paisa per 10 KB on 2G or 3G. They did not slash the tariff on data plans, rather the price cut is done on Pay-As-You-Go.

Not only that the limitations of the price cut are many. Vodafone did that on selected circles, on 2G only and now it’s 2p/10kB. Airtel did it on selected circles and selected 2G data plans and now it’s 1p/10kB. Idea made it for next 90 days starting July 1st and in 8 circles only and 2G data plans only. After A-Vo-Id group slashed 2G tariff in this manner, Tata Docomo followed them. But still Tata Docomo manages to offer better by extending 1p/10kB PAYG on a 3G plan also.

What I did not like their try to glorify their move. BSNL is offering VBC (volume based charging) of flat 1paisa /10KB for postpaid and 2paisa per 10KB (with or without data plan) for prepaid for a long time on Pan-India basis (applicable in all circles – Home and Roam), which is now followed by the private operators in only limited circle after slashing the rate. Aircel does best – offering unlimited plans on 3G (with speed restriction after certain usage).

Also data growth can not be seen with PAYG plan, as young population who will drive the growth on mobile data knows the calculation to go with cheap. With PAYG 1p/10kB 1GB 2G data will cost more than Re 1 per MB, while 2G data packs costs Rs 125 for 1 GB. PAYG can be helpful during emergencies, but it is not the solution people are looking for. That means few people will use it, and telcos’s main intension to drive data growth will not work.

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