BSNL plans free voice, cheaper package than Reliance Jio
State-run
BSNL will be the first to cut tariffs to better Reliance Jio's offer, a top
official said on Wednesday, setting the stage for a price war in the country's
crowded mobile telecom market.
The public
sector player is planning to follow Jio in offering free voice calling on its
network, and at plans that will be cheaper than the new entrant's. And unlike
Jio's offer that is available for only 4G subscribers, the BSNL plan will be
open to 2G and 3G users, which constitute the majority of mobile customers.
"We are
closely observing the market as well as Jio's performance. We will also come up
with lifetime free-voice plans from the new year as part of fresh
offerings," BSNL chairman and managing director Anupam Shrivastava told
TOI. "We plan to be even lower than the Jio plan, and this could be by Rs
2-4."
BSNL, that has
a strong market penetration and significant share in many key markets such as
Kerala, Himachal Pradesh, Haryana, Odisha, Punjab and UP, will announce the
zero-voice-tariff plans from January and these would be lower than the Rs 149
entry price of Jio. The loss-making PSU is, however, absent in key markets such
as Mumbai and Delhi (serviced by MTNL).
Shrivastava
said that the plan will be offered to BSNL's mobile customers who also have a
broadband connection at home. "The idea is to use the home broadband to
route outgoing mobile calls through the landline network. We estimate that a
large amount of time is spent at home, and so here we can ride on our wire-line
operations," he said.
However, the
free-voice facility will also be available when a subscriber would use it
outside the residence.
BSNL's offer
may put further pressure on operators such as Airtel, Vodafone and Idea
Cellular to slash tariffs, said experts. Prashant Singhal, partner at Ernst
& Young, said the BSNL offer will impact other telecom companies.
"Others will also have to follow suit. But this can be a risk for BSNL and
its average revenue per user (ARPU) can be hit."
Asked
whether BSNL will absorb the revenue-hit from loss of voice tariffs — which are
estimated to contribute nearly 70% to the business of telecom companies today —
Shrivastava said the company expected to make this up through new customer
additions. "The free roaming scheme cost us Rs 150 crore, but we made it
up by gaining more subscribers. In any case, our ARPU is around Rs 120 and our
free-voice plans will be upwards of Rs 140."
Source : The
Economic Times