Whether you use Jio, Airtel, Vodafone-Idea, get ready to pay more for mobile services— sooner than later
- If Vodafone has to pay up $4 billion, it might not be able to survive, say analysts.
- If the market ends in duopoly, there could be a ‘real’ tariff hike in the offing which will spoil the cheap data party for the market.
- India has 581 million data subscribers and many of them consider data a utility.
There are two possible scenarios from here. If DoT decides to waive the penalties and interests that these telcos have to pay, then Vodafone might survive. If that happens, then Jio will continue with its plan to acquire 500 million subscribers in all and initiate a tariff hike in another year, as per Spark Capital’s predictions.
A real tariff hike could hit telecom customers
This will also be a ‘real’ tariff hike which means Jio might not just cover the 30% price gap it has with other telecom players, it might go ahead and increase more. For one, Airtel and Vodafone had launched 4G data services at ‘introductory prices’ when the market growth was not as fast.
The entry of Jio with ‘cheap’ plans has changed that. Now India has 581 million data subscribers and consumption is also growing indicating an ‘addiction’. It means, the market is just right for a price hike. If Jio rises prices, others will follow suit.
A dangerous duopoly might hurt Indian consumers
In the second scenario, DoT might not waive tariffs and penalties turning India into a ‘dangerous’ duopoly with only Jio and Airtel left. If Vodafone has to pay up $4 billion, it might not be able to survive, say analysts. In this scenario, Jio will race faster to the finish line as a large number of subscribers are up for grabs.
As per the research report, Jio could get a tad more ambitious and increase its subscriber acquisition number to 600 million or more. It would also provide it with around 50-55% of market share and it would provide it disproportionate power to price it as it wants. But these price hikes may be delayed by another year so that Jio has acquire an extra 150 million users. Then again, it might turn vigorous.
The other player Airtel will also price aggressively going ahead, bringing India data prices on par with international levels—which will make it unaffordable to the many who enjoy it now.