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Reliance Jio rules: Bharti Airtel, Idea Cellular freebies fail to lure subscribers

The Financial Express logo The Financial Express 15/02/2017 FE Bureau

To counter Reliance Jio's free service offer, incumbent operators like Bharti Airtel, Vodafone and Idea Cellular adopted the strategy of offering more data at the same price and also bundling data with calls, making the latter free.

Per GB price of data has come down from Rs 250 to around Rs 50.

However, the October-December numbers of Bharti and Idea show that this has not led to increase in subscribers; in fact there has been a decline, Bharti reported a 4.1% increase in monthly churn and its total data customers declined 12.4% sequentially to 54 million. Its 3G/4G customer base shrank 8.8% quarter-on-quarter to 37 million.

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Idea's monthly churn also increased to 6% and it also for the first time witnessed a decline in its total data customers by 11.32% sequentially to 48.6 million.

Its 3G/4G customer base shrank 6.32% sequentially to 32.6 million. In this space Jio has emerged the market leader with around 73 million subscribers.

A sharp decline in data realisation has also taken place in the case of both the operators. It is quite apparent that customers are not using cheaper data as usage for Bharti has come down. In the case of Idea, it increased 1% sequentially but gains were wiped out due to lower yields. In fact, in the case of Bharti, data realisation per MB was down 10.5% sequentially, the highest so far.

The story is no different on the voice front where average revenues per user are down. Here, usage has increased but due to free minutes, realisations have declined. This is a setback because for the past several quarters, mobile operators have been slowly but steadily improving their realisation by curbing freebies but that has got changed during the quarter due to Jio's entry.

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