The entry of Reliance Jio could finally lead to lower price offerings from Bharti Airtel. With Reliance Jio offering free voice calls across the board on its network, Airtel and other telecom service providers are definitely feeling pressure.
In order to counter Reliance Jio, Airtel plans to cut prices on its services, but free voice calls across-the-board won't be coming through anytime soon. Speaking with PTI, Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel termed the telecom sector as a "brutally competitive market." He added, the competitors have kept the company on its toes, but Airtel is not obsessed with them.
“If the question is are you going to see price erosion… I think given that you have a new entrant on the horizon, yes, you will see some price erosion. Because that is the game new entrant will play,” Vittal told PTI. Reliance Jio has shaken up the telecom sector in India with free access to unlimited data and voice calls till December under 'Welcome Offer'.
Reliance Jio has been conceived from the ground up as the 4G VoLTE network. The service works only with compliant 4G handsets, offering free data upto 4GB per day at maximum speed. Bharti Airtel offers free voice calls on its Infinity plans priced at Rs 999 but Vittal says the free service won't come down to cheaper price range.
Airtel also says the market will continue to offer dual services - with individual plans for data and calls. Airtel wants to compete in the bottom end where people prefer a de-coupled pricing between voice and data services.
With Reliance Jio's entry, Bharti Airtel says the competitive pressure will continue but the company is confident about staying competitive in the market. “With competitive intensity you could see some pressure on the mobile revenue growth because if pricing comes down it may not all get compensated by volume. That is something we have to be prepared for… we have to see how we grow our other businesses faster and if pricing comes down, how do we create more capacity, so customer experience does not degrade,” Vittal told PTI.
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