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New Delhi: The Telecom Regulatory Authority of India ( Trai ) has asked telcos to further slash their voice- and SMS-only tariff proposals, requiring companies to provide a bigger discount on unbundled zero-data plans that might appeal to cost-conscious 2G subscribers and delay upgrades. Officials told ET that Trai met executives from the telcos over the past two days and asked them to reduce prices in line with the reduction in data benefits. "The price reduction for voice-only plans should depend on the average cost of data the telcos incur," said an official privy to the details.
In response to Trai's directive, Bharti Airtel has again reduced the prices of its two voice-only plans by another 6%. Advt When compared with the original bundled plans, the tariff is now lower by more than 8%. Other telcos are also expected to slash prices on such plans.
The Trai directive on voice and SMS-only plans came into effect from January 23. The financial impact on telcos would depend on the number of consumers availing the new offerings. Experts believe that since there would now be substantial price difference between bundled and voice-only plans, there could be sufficient demand for no-frills subscriptions.
Queries sent to Bharti Airtel , Reliance Jio and Vodafone Idea-the three private telcos-remained unanswered until the publication of this report. Analysts had earlier said they expected only a marginal impact as the price differential between bundled offerings and voice-only plans was very low. But with the revised cuts, the voice-only plans might prove attractive even for consumers using limited data resources.
The move is also going to impact the ongoing migration of 2G users to 4G and 5G, potentially denting the plans of telecom firms to raise the average revenue per user (ARPU). When a 2G user migrates to 4G, there is 1.5x to 2x jump in ARPU, say market watchers.
The three private telcos have been rapidly migrating 2G users to 4G to boost revenues. But experts believe the latest Trai mandate of voice- and SMS-only packs is slated to slow down the upgrade process a bit, and impact Arpu growth. All the telcos have announced their voice-only packs, but they were just around 2% cheaper than the regular bundled offerings.
This forced the regulator to ask the firms to reduce the prices of tariff plans in respect to reduction in data benefits. When the metric is applied, the plans that offered higher data benefits and would now be converted into voice-only plans will face a higher price reduction. The primary target users of such plans are likely to be the 200 million 2G users, dual SIM owners and the elderly, living in rural areas, who don't want to buy current bundled offerings.
Advt Airtel has launched two revised plans-for Rs 1,849 which comes with 365 days validity and Rs 469 for 84 days. Both offer unlimited calls. Airtel has earlier launched Rs 1,959 and Rs 499 plans with the same sets of benefits.
Jio has launched plans for Rs 1,958 with 365-day validity and Rs 458 for 84-day validity. The regulator believes that mandating voice- and SMS-only plans would provide an option to subscribers who do not require data. Earlier, the telecom companies had told Trai that the current bundled tariff plans have been designed to cater to the needs of all shades of users, which is why there was no need to introduce voice- or SMS-only packs.
By Kiran Rathee , ET Bureau Published On Jan 25, 2025 at 07:36 AM IST Telegram Facebook Copy Link Be the first one to comment. Comment Now COMMENTS Comment Now Read Comment (1) All Comments By commenting, you agree to the Prohibited Content Policy Post By commenting, you agree to the Prohibited Content Policy Post Find this Comment Offensive? Choose your reason below and click on the submit button. This will alert our moderators to take actions REASONS FOR REPORTING Foul Language Defamatory Inciting hatred against a certain community Out of Context / Spam Others Report Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis.
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