The uptake of 3G services in India has been unexpectedly slow. Though most operators had launched these services by early 2011, the user base has not grown as per expectations. As of March 2012, there were only about 15 million 3G users against a mobile subscriber base of 951 million.
High tariffs, complicated plans, poor coverage and lack of affordable devices are the key factors for the slow uptake.
Telecom operators, who made significant investments in 3G spectrum and service roll-outs, are looking for ways to reverse this trend. While the cost of smartphones and 3G-enabled handsets have dropped below Rs 5,000, slashing 3G tariffs could give a fillip to uptake.
Over the past year, state-owned operators Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), which received 3G spectrum before the private operators, did reduce tariffs to drive service adoption, but the price drop was marginal and did not have any significant impact on the user base.
In April 2012, BSNL revised its 3G data plans and at around the same time, Aircel introduced unlimited 3G data plans ? called pocket internet smart plans ? at reasonable tariffs. These initiatives have worked in favour of the operators.
Adding to the competition, in May 2012, Bharti Airtel reduced 3G tariffs by about 70 per cent, the first major price revision since the launch of these services. Operators like Idea Cellular, Vodafone India and Reliance Communications (RCOM) followed suit.
According to industry experts, a tariff war in the 3G space was expected. ?India is a price-sensitive market and this is a volumes-based game. If a company reduces prices significantly for any service, sales will go up. The increase in volumes will make up for the investments,? says Jaideep Ghosh, partner, KPMG.
While a sharp increase in uptake may not be visible immediately, the move to reduce 3G tariffs will have a positive impact on service adoption.
A look at the revised 3G tariffs and new services of various operators?
Bharti Airtel
The operator has launched affordable and user-friendly 3G tariff plans. For both post-paid and prepaid users, the browsing rate has been reduced from Re 0.10 per 10 kb to Re 0.03 per 10 kb, while data download limits have been increased. Users can now download 300 MB of data for Rs 100 instead of 200 MB earlier. Also, 1 GB of data can be downloaded for Rs 200 instead of Rs 600 earlier. The new pricing scheme is applicable only to 3G non-pack users.
Bharti Airtel has also introduced the Smartbytes packs for additional data usage for post-paid users. These provide subscribers the choice of incremental 3G data usage packs at predetermined prices. For instance, one of the operator?s new 3G packs, the ?snacking proposition?, offers 30 minutes of usage for a day for Rs 10.
Idea Cellular
Idea Cellular has reduced its 3G tariffs by 70 per cent. After the revision, prepaid and post-paid customers will pay Re 0.03 per 10 kb of data as against Re 1 per 10 kb earlier.
The operator has introduced the tariff cut across various offerings including sachet, regular and unlimited packs. The revised sachet pack of Rs 10, for instance, offers 30 minutes of high speed internet surfing. Idea has also launched the HERO-25 plan, which provides 100 MB of data download with a validity of three days for Rs 25. For regular home internet users, the operator is offering 1 GB of data download for Rs 250.
Vodafone India
Vodafone India has revised its 3G tariff plans for both prepaid and post-paid users. These include daily, weekly and monthly plans. The daily plan, priced at Rs 20, offers 25 MB of data usage. The weekly plan is priced at Rs 44 and offers 150 MB of data download. The monthly 3G packs range from Rs 102 to Rs 451 and entail different usage data caps. Vodafone India also offers recharge coupons worth Rs 1,501, which provide 10 GB of 3G data usage for 30 days.
The network speed drops after the data usage limit is crossed and the subscriber is charged at Re 0.02 per 10 kb.
Users are charged Rs 251, Rs 351 and Rs 850 for 1 GB, 2 GB and 3 GB of data download respectively.
RCOM
RCOM has introduced the ?My Best Plan? 3G data scheme under the Netconnect brand. The plan entails a monthly rental of Rs 250 and offers 2.5 GB of data download. Users can download 1.5 GB of data beyond this limit, which is charged at the rate of Re 0.20 per MB and Rs 300 is to be paid as extra usage charges.
Aircel
Aircel has introduced nine 3G plans under the Pocket Internet Smart Plan series. These plans offer data transfer of 50 MB to 10 GB. These are priced between Rs 7 and Rs 997 and come with a validity of 1-30 days.
Recently, Aircel introduced the 3G Aircel Pocket internet data card. The product is available in all the 13 circles where the company has 3G licences. The data card can function on 3G as well as 2G networks. The operator has launched five plans for this data card. Prices range from Rs 8 to Rs 999 and the plans have a validity of 1-30 days. All five offerings provide unlimited data usage and connectivity speeds of 128 kbps-7.2 Mbps.
BSNL and MTNL
BSNL has reduced its mobile data usage charges by 75 per cent for usage beyond the prescribed limit. This is applicable to both 2G and 3G post-paid data plan users. The revised rates are Re 0.01 for 10 kb, instead of Re 0.04 per 10 kb earlier.
Meanwhile, MTNL has reduced its 3G data charges to Rs 22.50 per GB for users in Delhi. For low-volume users, the operator is offering 1 GB of data for a week for Rs 76 or 2 GB for one month for Rs 250. MTNL?s 3G services are also available in bulk offers. The 100 GB pack costs Rs 5,000 and is valid for a year, while the 200 GB pack is available for Rs 4,500 and can be used over six months.
