The telecommunications price war in India is back, and this time the battle is fought with gifts.
After announcing the first rate hike in three years in 2019, telecoms operators are offering incentives like Netflix service subscriptions to Amazon Prime to win over customers in a market hungry for content.
With cinemas in India, one of the world’s largest film markets by number of tickets sold, closed due to pandemic restrictions, the demand for entertainment content has changed online. Several big-budget local movies have been released on streaming platforms this year.
On Tuesday, Reliance Jio Infocomm Ltd., the country’s largest telecommunications company by subscribers, launched a new Rs 399 ($ 5.4) plan for users who opt for monthly billing over pay-per-pay packages use. In addition to 75 gigabytes of data, customers would have access to Netflix on a mobile device and a one-year subscription to two over-the-top apps and access to Jio’s library of movies and songs.
“Reliance Jio’s new postpaid plans offer more content and are 20% off” for Bharti Airtel Ltd., analysts at Jefferies India Pvt. Said in a report to clients. Bharti’s comparable basic plan is priced at Rs 499 and offers the same amount of data, but does not include access to Disney + Hotstar and Netflix, while Vodafone Idea Ltd.’s plan offers 40 GB of data and does not include any of all three online platforms, according to analysts.
In the past four years, the number of users opting for monthly mobile billing has dropped dramatically and these users now make up around 5% of the total 1.14 billion subscribers and generate 15% of the company’s revenue. sector, according to analysts at Jefferies.
Although Jio introduced its postpaid plans in 2018, the company’s offerings did not see much traction, showing the ‘stiffness’ of this customer base, according to analysts at Morgan Stanley.
“This time around, extremely aggressive content offerings could be the key draw for consumers,” analysts at Emkay Global Financial Services Ltd. Naval Seth and Sonali Shah said in a note. They expect Bharti and Vodafone Idea to follow Jio with similar deals with OTT platforms to retain monthly bill paying customers whose average monthly spend is higher than prepaid users.
Bharti Airtel has lost almost 9%, while Vodafone Idea has fallen 12.7% in two sessions since Jio announced the improved postpaid plans.
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