In our previous accounts of telecom news, we have reiterated numerous times about how the current situation in the telecom industry is expected to stabilise. Although the telecom operators might seem adamant in staying on their path of predatory pricing, the overall plans and pricing of the industry, in general, are all hanging around the same point. It is my opinion that the Idea-Vodafone merger has been a crucial factor in this regard, which lead to consolidation in the industry. With two more small telcos, one already bankrupt and the other standing on the verge of insolvency, no doubt remains that the reins of the entire industry now rests in the hands of a few telcos. Below I have gone over the reasons why the telecom industry is heading towards a stable state, with a particular focus on the prepaid data war.
Prepaid Data War Showing Signs of Cooling Down
There was once a time, only a few months back where telecom operators were launching new and revised prepaid plans left, right and centre back to back. However, I can vouch that in the present scenario a different trend can be seen popping up in the industry. Instead of putting a laser focus on averaging new customers in the prepaid data segment, now telecom operators are looking at other areas to rake in new subscribers. According to my opinion, two most prominent areas in this regard include broadband and the postpaid plan segment.
The focus of the telcos, now instead of landing right on a single spot with full intensity has been spread over three different sectors. The announcement of the launch of Reliance Jio GigaFiber has only acted as a catalyst to fasten this shift. After taking a thorough look at the previous strategies of Reliance Jio which it has used to attack the market during its launch and other product roll-outs, I am sure that the Mukesh Ambani led telco will resort to predatory pricing and the attraction of free services to lure in the customers. If that is the case, which has already been reported by us, the increased efforts in the broadband sector by the other telcos most certainly makes sense.
Growing Focus on Broadband and Postpaid – The Actual Change
Bharti Airtel has already launched its MyHome offer under which it promises free data to the bundled users of broadband and postpaid. Under this offer, the former market leader will be offering 5GB or 10GB of data to its Broadband + Postpaid plan users. Further, like I have highlighted before, as part of the news, Airtel is also putting its effort in summing up the bills of its all services like TV, broadband and postpaid into a single one, which will not only allow for more relaxed and smooth bill payment, but will also make the consumers eligible for an overall discount on a combined bill.
I see the same pattern emerging in the Postpaid war as well. The introduction of Reliance Jio’s Rs 199 postpaid plan has stirred up things in this sector. Other carriers like Idea Cellular, Bharti Airtel and Vodafone, have all either introduced new more economical plans or made revisions to their existing Postpaid plans. I also noted that the select few of the lot are providing services like data-rollover, a benefit which remains untapped in Reliance Jio’s postpaid offering. Further, all the telecom operators are using additional benefits like free Amazon Prime Membership to lure the customers. It is my opinion that in the light of recent events such strategies only mean that the postpaid data segment is just going grow to hotter as the days pass.
Summarising, I would like to say that although the prepaid customers make up for the majority of the total subscriber base for the telcos. The postpaid subscribers contribute the actual, larger than expected share of the pie in the revenue. Which is why it comes as a no surprise that telcos have now started focusing on postpaid. Another thing to note here is that the increasing popularity of fibre in India is opening new gates of revenue sources for the telecom operators and the companies do not want to miss this bandwagon.
Down in the comments below let us know your thoughts about the issue. Whether or not you feel that the pricing in the prepaid data war is headed towards stagnation, and what are the patterns you see emerging in broadband and postpaid in the coming days.
Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.