India’s telecom sector had an easy time. I’m old enough to remember the era when we had 12 players in GSM and CDMA technologies. When the market structure is like this, a pricing war was an obvious outcome. Time has changed. Now the few telecom companies that are left are focusing on increasing the average revenue per user. The cost of your postpaid bills and prepaid recharge is increasing. There are many ways to go about this, and a sophisticated snapshot of the last twelve months makes it clear that telcos are trying to do it all. They hope that bundling subscriptions, a pitch of value-added services and network-level features will prevent user churn (portability means there’s less consumer loyalty, and in a way, rightly so).
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I will particularly focus on the headroom that tariff pricing changes give telcos. For example, Reliance Jio is mentioning something called “premium 5G”. In an earnings call last week, Anshuman Thakur, strategy head, Reliance Jio Infocomm, said, “On the product side, we can offer 5G premium services with our stack. Now, some of this is being done on a trial basis. We need to make sure that we are completely regulatory compliant, but these products are ready for the market.”
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What does this mean? 5G slicing, in a way, is to give priority to some customers who have subscribed to an add-on pack or service with faster 5G services. On the same network. This is not new, but Jio is not offering this to consumers yet, as the rules for priority services are still not fully implemented. But it’s a strong pitch when it can be made — a better experience for those who need it by paying extra. There is a level of choice, although some might argue that this could worsen the experience for those who don’t, but there is little evidence that this would be the case. In fact, the extra payment you pay enables Jio to manage and maintain a network capable of effectively doing “premium 5G”.
Bharti Airtel first made the pitch for network-level spam protection by marking incoming text messages as “suspected spam” to warn unsuspecting users against clicking on any links in that message or replying with any personal or sensitive information. Scam methods have evolved, the newest being the traffic challan payment scam. Although I remain loyal to Truecaller because it is a lifesaver in many ways, the network-based warning signals are helpful for a much larger demographic of users.
The reality now is that we are paying more for more than we can potentially consume. Network level improvements, 5G rollout, and bundling costs are all included in bill plans and recharge packs. Make no mistake, we pay for all this not at once, but shared among other users on the same network. I may not use the JioHotstar subscription bundled with the prepaid pack, but you probably do. But here, a question becomes relevant – where is the tariff option for customers who do not want any additional layers?
jio’s ₹The $349 plan, for example, bundles a lot more, including unlimited 5G, an 18-month Google Gemini Pro plan with AI, and 5TB of cloud storage (you’ll have to keep recharging with that, too). ₹Keep in mind, plans of $349 or more for those 18 months; A nice lock-in of sorts), 3 months JioHotstar subscription and more. What if I just want unlimited 5G and no other riffraff? Very few options, except one ₹₹198 plan with 14 days validity, which becomes more expensive after 28 days. It’s a similar story with Airtel’s prepaid plan structure ₹The $349 plan includes unlimited 5G usage with a fixed tenure of 12 months of Adobe Express Premium and an Apple Music subscription – but if one just wants unlimited 5G there is no lower priced option.
It has been a slow and very quiet death of budget plans. Airtel had once offered ₹A plan of Rs 799 in which users got validity of 84 days. Until a few days ago, that validity period now requires you to spend ₹899 (and by the way, it was replaced for the first time ₹859, if I’m not mistaken). You can no longer look for value in this telecom era, be it prepaid or postpaid. Because the definition of value has changed to include things you don’t want and bundle things you don’t need.
April has been the month of the “cricket pack”, with Airtel and Jio trying to cash in on the IPL momentum. Both have launched data and regular recharge plans with JioHotstar subscription. But what if one doesn’t want that and instead watches IPL on Star Sports on linear cable or DTH? You’ll still get what you don’t need.
There is an irony in all this. Although India still has some of the cheapest data prices anywhere in the world, the value of that data has declined significantly over the years. In 2016, 1GB of data will last you a week, maybe even more. Now, you’re probably spending almost as much every night between finishing dinner and finally falling asleep, scrolling through brain rot content on social media. The end result is, you’ll have to pay for the unlimited 5G plan anyway. And this is where ‘more’ comes into play as telcos raise average revenue per user (ARPU) metrics.
I understand their reasons for doing this. Capex costs are increasing and investment is required to expand and support connectivity, spectrum costs and volume of business operations. You have no choice but to keep paying. But remember, the House always wins in the end. This time, the house is of the telecom company with 5G towers and has the logo of JioHotstar on it.
Vishal Mathur is Technology Editor at HT. Tech Tonic is a weekly column that looks at the impact of personal technology on the way we live our lives, and vice versa. The views expressed are personal.
