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<ul><li>Yesterday, India's IT Minister tweeted that the country's data plans continue to be the cheapest in the world despite a hike in tariffs by telecom operators.</li><li>Data shows while India will continue to have one of the least expensive data costs in the world — it will no longer be the cheapest.</li><li>Kyrgyzstan now has the lowest cost per GB in the world at $0.27.</li></ul>India's mobile tariffs are no longer the cheapest in the world after an almost 40% hike in subscription rates by the country's <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-may-still-have-the-cheapest-plan-on-offer-as-airtel-and-vodafone-idea-have-a-lead-on-telecom-tariffs/articleshow/72335722.cms">leading telecom operators</a> — Vodafone Idea, Bharti Airtel and Reliance Jio — despite IT Minister Ravi Shankar Prasad's assurances. 
	
	
	
	
	
	<div type="twitter" handle="rsprasad" handlename="Ravi Shankar Prasad" image="http://pbs.twimg.com/profile_images/727848709518675968/xebahww0_normal.jpg" favoritecount="661" retweetcount="294" status="India’s Mobile Internet rate per GB remains by far the lowest in the world. UK based https://t.co/8ZGRuuOuWF which… https://t.co/cMBb1O5okt" createdat="1575285902000" id="1201462273224531968"></div>













 Before the hike in prices, the average cost per 1GB of data in India was $0.26, according to <a href="https://www.cable.co.uk/mobiles/worldwide-data-pricing/">cable.co.uk</a>. Accounting for a 40% increase, the cost will now lie at around $0.36 per GB — making India's data consumption more expensive than Kyrgyzstan. As per Business Insider's calculations, even if the increase is limited to 30%, as <a href="https://m.economictimes.com/industry/telecom/telecom-news/reliance-jio-plans-could-be-20-cheaper-than-other-telcos-report/amp_articleshow/72335807.cms">some plans claim</a>, the cost will be at $0.33 per GB — above Kyrgyzstan's rock-bottom prices of $0.27. 
 
 
 
 
 
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 And, data is only one facet of the increase in prices. Customers will also have to bear the burden of being charged to place calls outside their networks since most telecom plans no longer provide ‘<a href="https://www.businessinsider.in/tech/apps/news/jios-new-recharge-plans-can-be-confusing-heres-how-to-figure-them-out/articleshow/72257183.cms">unlimited calling</a>'. Data will still be pretty darn cheap Even though data rates in India might not be the cheapest — they're still among the lowest in the world. Other developing nations around the world bear much higher tariffs. In Brazil, for instance, the cost of data is 12 times more expensive at $3.50 per GB. And, in China — one of India's neighbors — 1GB costs $9.89 on an average. Data in developed nations like the United States and Canada costs in excess of $12 per GB. Zimbabwe telcos charge $75.50 for 1GB on an average, making its data the most expensive in the world. See also: <a href="https://www.businessinsider.in/business/corporates/news/jio-will-raise-tariffs-after-airtel-and-vodafone-idea/articleshow/72138425.cms">Mukesh Ambani joins his peers to end the cheap data party for Indians</a> <a href="https://www.businessinsider.in/tech/apps/news/jios-new-recharge-plans-can-be-confusing-heres-how-to-figure-them-out/articleshow/72257183.cms">Jio's new recharge plans can be confusing — here's how to figure them out</a>

Fact check: India's mobile tariffs aren't the cheapest in the world anymore

<ul><li>Bharti Airtel and Vodafone Idea hiked their tariffs which will take effect from December.</li><li>This time around, their arch rival Reliance Jio might follow suit.</li><li>A few weeks back, Jio faced a customer backlash for increasing tariffs by<a href="https://www.businessinsider.in/business/news/mukesh-ambanis-jio-faces-backlash-for-tariff-increase/articleshow/71573757.cms"> a mere six paise.</a></li></ul>Like in mythical stories, a great adversary leads to an unexpected windfall. Cornered into paying up as much as<a href="https://www.businessinsider.in/business/news/reliance-jio-airtel-and-vodafone-idea-may-raise-tariff-soon/articleshow/71757089.cms"> ₹92,000 crore in past</a> dues to telecom department --- Bharti Airtel and Vodafone Idea did something they wouldn’t have otherwise dared to --- increase tariffs starting December. This time around, their arch rival Reliance Jio might follow suit. Just a few weeks back, they faced a backlash for increasing tariffs by<a href="https://www.businessinsider.in/business/news/mukesh-ambanis-jio-faces-backlash-for-tariff-increase/articleshow/71573757.cms"> a mere six paise after government</a> made them pay Interconnect Usage Charge (IUC) to other players. But this time, it might be an opportunity go with their rivals. State-owned BSNL and MTNL are not real competition and are now consumed with staying afloat from heavy debt. This time around, Jio can ride the tariff hike wave without bellyaching<a href="https://m.economictimes.com/industry/telecom/telecom-news/jio-faces-customer-rage-on-twitter-over-move-to-charge-voice-calls/articleshow/71532717.cms"> from consumers</a> and trolling by rivals, unlike the last time. More importantly, Jio’s tariffs are lower than that of Vodafone and Idea by at least 30%, which means even if they increase tariffs, they will still be the cheapest. They can maintain their competitive advantage—without ruffling many feathers. Jio might not look and sound as desperate as their competitors due to a recent<a href="https://www.businessinsider.in/mukesh-ambanis-reliance-jio-raises-25215-crore-for-its-invits-from-canadian-fund-brookfield/articleshow/70295640.cms"> equity infusion</a> from a Canadian investor – but they too need tariff hikes. “Jio would have to increase tariffs as there is no way that they can carry on at the rate that they are going. It is just a matter of time,” Alok Shende, telecom expert and managing director at Ascentius Insights told Business Insider India, before the SC order. However, Jio might have another hurdle as it has set new subscriber addition targets of attaining 500 million subscribers, as announced. And it still has a few million more to add as its subscriber base is currently at 348 million. “RJIO’s pricing hinges on its aspiration of 500 million subscriber base and parent Reliance Industries’ aspiration of paring net debt to zero. Hence, considering higher subscriber acquisition target, we argue the company may delay tariff hike by a few quarters. That said, given the company’s ballooning debt and its commitment to reduce debt, tariff hikes look certain,” said a CLSA report in October. While it might end the ultra low tariff party for subscribers, if Jio too joins in the bandwagon that Airtel and Vodafone started--- it will end the second telecom tariff war. That is the good news that telecom investors have been waiting for years now. SEE ALSO <a href="https://www.businessinsider.in/business/telecom/news/airtel-and-vodafone-idea-plans-to-hike-tariffs-after-posting-record-losses/articleshow/72119603.cms">Airtel and Vodafone Idea hike tariffs after posting record losses</a> <a href="https://www.businessinsider.in/business/news/reliance-jio-airtel-and-vodafone-idea-may-raise-tariff-soon/articleshow/71757089.cms">Whether you use Jio, Airtel, Vodafone-Idea, get ready to pay more for mobile services— sooner than later</a> <a href="https://www.businessinsider.in/business/news/mukesh-ambanis-jio-faces-backlash-for-tariff-increase/articleshow/71573757.cms">Reliance Jio is paying the price for being the ‘second SIM’ of choice</a>

Reliance Jio gets a golden opportunity to hike tariffs and still stay ahead of rivals

<ul><li>Within 24 hours of Airtel and Vodafone increasing tariffs, Reliance Jio too said it will also look at the same. </li><li>Will take measures including appropriate increase in tariffs in the next few weeks, Jio said. </li><li>Vodafone Idea stock gained by 20% in today’s early trade. </li></ul>In a <a href="https://www.businessinsider.in/business/corporates/news/mukesh-ambanis-reliance-jio-could-increase-tariffs/articleshow/72121399.cms">much-expected turn of events</a>, <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword>’s Reliance Jio has toed the line that was breached by his arch rivals –Vodafone Idea and Bharti Airtel. Within 24 hours of the latter announcing that they are increasing tariffs, Reliance Jio said it will also look at the same. “Like other operators, we will also work with the Government and comply with the regulatory regime to strengthen the industry to benefit Indian consumers and take measures including appropriate increase in tariffs in the next few weeks in a manner that does not adversely impact data consumption or growth in digital adoption and sustains investments,” said Jio in a press release<a href="https://www.bseindia.com/xml-data/corpfiling/AttachLive/572692a0-b213-4953-9e63-e08d1a7d3b81.pdf"> yesterday</a>. The move has led a rally in Reliance Industries’ stock which went up by 4% in early trade, but the biggest gainer as the second telecom tariff war is cooling down is still Vodafone Idea. The stock has been taking a beating ever since Supreme Court order <a href="https://www.businessinsider.in/stock-market/news/reliance-industries-jio-stock-prices-shoots-up-after-supreme-court-verdict/articleshow/71737746.cms">supported Department of Telecommunications </a>in the case on defining aggregate gross revenues (AGR). After falling to as<a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms"> low as ₹3,</a> it has gained as much as 21% in today’s trade. This good news however has another story, and not a pleasant one for the scores of telecom consumers. On an average, Indians have been enjoying 1 GB data at ₹18 or $ 0.26! In comparison, Americans pay as much as $6 per GB. Jio however has been heralding this change as its tariffs are 30% cheaper than that of Vodafone and Airtel. SEE ALSO <a href="https://www.businessinsider.in/business/corporates/news/mukesh-ambanis-reliance-jio-could-increase-tariffs/articleshow/72121399.cms">Reliance Jio gets a golden opportunity to hike tariffs and still stay ahead of rivals</a> <a href="https://www.businessinsider.in/reliance-jio-airtel-and-vodafone-idea-may-raise-tariff-soon/articleshow/71757089.cms">Whether you use Jio, Airtel, Vodafone-Idea, get ready to pay more for mobile services— sooner than later</a>

Mukesh Ambani joins his peers to end the cheap data party for Indians

<ul><li>Last week, Jio increased its calling tariffs by 6 paise per minute. </li><li>India Ratings says that the industry’s average revenue per user (ARPU) will go up by 15-18% after Jio’s price hike. </li><li>Jio’s data tariffs are 25-30% cheaper than that of Airtel and Voda-Idea. </li><li>Jio is a net payer of IUC charges, whereas Voda-Idea and Airtel are net-receivers of IUC receipts--as calls originate from Jio and land on other networks. </li></ul> It had to happen one day. But Reliance Jio’s move to increase tariffs came sooner than expected. Even as Jio, Vodafone Idea and Airtel are teasing each other over it on social media, and thousands are trolling Mukesh Ambani for ‘breaking his free’ promise---it is good news for the industry. At least that is what India Ratings believes. Jio charging its customers 6 paise per minute on its ‘free’ calling package—can help increase the rising margins of the industry. The sector’s average revenue per user will go up by ₹9, and in general increase by 15-18% according to the rating agency. Like Jio says in its tweet, this amount will be going to Vodafone Idea and Airtel as Jio can no longer get away without paying telecom department’s mandatory inter-connection (IUC) charges. This is the charge paid to a network which is receiving calls, by the network from where a call originates. In an ideal situation, the amount all networks pay each other should balance out—considering their subscriber number is around the same. However, that is not to be. Jio has the most to lose. The offnet minutes of usage is 64% for Jio, while it is at 41% for Voda-Idea and 45% for Airtel. “Also, of the total offnet voice traffic, net incoming minutes as a proportion of total offnet minutes stands at negative 29% for R-Jio whereas the same is 9% and 19% for Airtel and Voda-Idea respectively, implying that network voice traffic imbalance is significantly higher for R-Jio compared with peers. Hence, R-Jio remains a net-payer of IUC expenses, whereas Voda-Idea and Airtel are net-receivers of IUC receipts,” says India Ratings. Basically, calls originate from Jio and land on other networks. Jio users continue to keep other network SIMs It means that more people are using Jio SIMs for its cheap data plans, and also for making the ‘free’ calls it offers. It makes sense as Jio’s data tariffs are 25-30% cheaper than that of Airtel and Voda-Idea. Yet, users have not given up their basic SIMs which belonged to other networks, and continue to exist. These numbers are ‘primary’ phone numbers which are key to their bank accounts and other necessary identifications. And, few seem to believe that cheap tariff party will not continue to exist. All mixed with the ease of owning multiple SIMs have played against Jio. Had subscribers chosen to keep only Jio connections and get rid of others, they would have ported to it. Looks like not many have done that.

Reliance Jio is paying the price for being the ‘second SIM’ of choice

<ul><li>If Vodafone has to pay up $4 billion, it might not be able to survive, say analysts. </li><li>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. </li><li>India has 581 million data subscribers and many of them consider data a utility. </li></ul>This might be the last year that Indians can stream movies on mobile phones with reckless abandon. Everyone has expected Jio to increase tariffs at “some point in time”. But yesterday’s Supreme Court verdict on adjusted gross revenue (ADR) has hastened it. It means Airtel and Vodafone have to cough up over ₹50,000 crore and will definitely weaken them. What is good news for Jio could also be bad news for customers. 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.

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Fact check: India's mobile tariffs aren't the cheapest in the world anymore

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Whether you use Jio, Airtel, Vodafone-Idea, get ready to pay more for mobile services— sooner than later

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