The 3G tariff wars are heating up. Reliance Communications, India’s third largest mobile service, by customer base, has slashed its tariffs for 3G Data services by almost 50%. Unsurprisingly, companies like Airtel too have responded with similar price cuts, which will be applicable from next month. While Reliance customers are being automatically migrated to the revised & reduced tariffs, customers of other service providers may have to get in touch with their respective service providers for informing about the choice of revisions.
Why the price cut? Not too long ago, multiple companies had aggressively slashed prices of 4G as well as 2G Data services. Hence this is the fourth time they are doing so. The companies might have multiple agendas to accept reduced fees.
4G based data services which offer speeds up to 80 Mbps are already here. The only drawback presently is that the service can be availed only through USB Dongles & it is not pan-India. 3G on the other hand has a far greater spread & users can expect fair coverage, as well as speeds up to 8 Mbps. Though this may not match 4G speeds, it is nonetheless acceptable.
Once 4G services become mainstream, people could forgo 3G & jump directly from 2G to 4G causing the companies, who invested heavily in 3G, to go in huge financial deficit. The infrastructural expenditure would not be recovered. Hence it is imperative for the companies to recover the costs & make some profit.
Indian consumers are steadily moving towards data consumption & traditional revenue streams like Voice & SMS has taken a subdued priority. Subscribers have been using internet based messaging & communication tools, but unfortunately for the mobile companies, the subscription for Premium, high-end & faster standards of internet has been very discouraging. This could be the direct results of high pricing. Do you think such price cuts could erode the appeal of 4G since customers will now enjoy relatively higher speeds at lower costs?