The Hindu Business Line : Reliance Infocomm slashes prepaid tariffs

RELIANCE Infocomm on Friday announced drastically reduced tariffs and roaming rates for its wireless prepaid service, delivering a body blow to GSM operators, some of whom increased these tariffs over the last week.

The new tariffs which have been brought down around 60 per cent, and were described as an `Independence Day Special,' would roughly coincide with the launch of rival Tata Teleservices Ltd's prepaid services, also scheduled for this month.

Moving completely contrary to the recent trend in the wireless market, Reliance has introduced a sub-Re 1 tariff (90 paise a minute, down from Rs 2.49) from Reliance IndiaMobile (RIM) prepaid to any other Reliance India Mobile or Reliance India Phone (fixed wireless service) subscriber. Calls to GSM operators and landlines will cost Rs 1.79 a minute, down from the Rs 2.49-to-Rs 2.99 range).

Inter-circle calls from RIM prepaid to any RIM or FWP/FWT anywhere in the country will now cost Rs 1.79 a minute, down from Rs 2.99, and to other GSM operators and landlines Rs 2.49, down from the Rs 2.99-to-Rs 3.99 range.

Contrast this with some of the recent tariff changes by the GSM sector. Operators Orange and BPL Mobile in Mumbai evened out prepaid tariffs to a flat Rs 2.75 a minute to both wireless and landlines (earlier tariffs to these lines were Rs 2.49 and Rs 2.99 a minute, respectively).

GSM operators Airtel and Hutch last Sunday increased monthly roaming rentals to Rs 49 and also increased tariff for incoming and outgoing calls while roaming within the country. Mobile-to-mobile STD calls were raised to Rs 4.9 per minute, up from Rs 3.49 in distance slab of 50 to 200 km. In the 200-to-500-km slab, tariff was raised to Rs 5 (Rs 4.95) and above 500 km, to Rs 5.65 per minute. This is much higher than RIM prepaid's maximum roaming charge of Rs 2.49 per minute.

The new tariffs were described as an offer of "freedom from the rising mobile tariffs across the industry."

For the same value of a prepaid refill amount, say Rs 325, a customer will get twice as many minutes as he would with any other GSM operator, said Mr S.P. Shukla, President, Wireless Products and Services, Reliance Infocomm, who agreed that this was indeed an objective.

From what is apparent, the new tariff structure is aimed at two objectives. Being still confined to the RIM prepaid service and not to RIM's post-paid service (which has the majority of customers), it is hoped that many of the post-paid customers will move into the prepaid segment. "We feel that those of our customers who would ideally like to budget their spends and who should ideally be in the prepaid sector would like to move," said Mr Shukla,

The other objective is to expand the wireless subscriber base to reach to the SEC C, D and E markets, said Mr Atul Jhamb, CEO (Mumbai, Maharashtra & Goa) at Reliance Infocomm. "This business is about critical mass, it is not a niche business, it is a leadership strategy that we have adopted," he said. And prepaid being the largest growth segment, it was only logical that Reliance Infocomm should have an attractive scheme in that segment, said officials.

With handsets available at Rs 2,999 and even a colour handset available at Rs 4,999, Reliance Infocomm will be able to address these categories, he said.

The company is working on new packages for its post-paid offers as well, said Mr Shukla.