India’s largest mobile operator Bharti Airtel has indicated that entry of newcomer Reliance Jio could lead to lowering of prices to some extent, but ruled out across-the-board free voice calls for all mobile plans.
Terming the telecom sector as a “brutally competitive market”, Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel, said that while competitors kept the company on its toes, it was 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 had stormed its way into the telecom sector by announcing a Jio Welcome Offer beginning September 4 with free voice calls and data on Jio mobile phone services that will be available till December 31, for those users who buy subscription by December 3.
In September, while announcing the launch, billionaire Mukesh Ambani had said that voice calling on Jio will be free for life and data would be charged at rock-bottom rates after the ‘welcome offer’ ends.
Vittal pointed out that while Bharti Airtel had already offered free voice calls on its Infinity plan (priced at Rs. 999), a similar freebie would not be possible across all segments of the market.
“There will be a large number of customers who are on basic feature phones and low end smartphones who will want to buy services differently. They will want to de-couple voice and data. Equally, there will be a set of market where they will want (it) bundled…If a guy is not paying for data at all, he will pay for something,” he said.
Asked if the company will be announcing voice free for life, just like rival Jio has, Vittal said, “If you are only buying voice, how will one do that?”
Terming the market structure as “dual”, Vittal said that the company would play at the bottom end, where people want de-coupled pricing between voice and data, and at the high end which prefers bundled offers like ‘Infinity’.
On how long Bharti anticipate the competitive pressures to last, Vittal said the market will continue to be competitive, but exuded confidence that the company “will compete”.
“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,” he said.