Reliance Communications has officially unveiled its much anticipated 4G data tariff plans, and they are unlikely to please CDMA data users who have recently upgraded to the new technology.
As of now, only Mumbai circle tariffs have been announced. We have separately carried news about Maharashtra and UP circles, which show slightly lower tariff charges compared to Mumbai.
While some considered the Maharashtra and UP 4G plans expensive, the Mumbai packs are priced even higher.
According to the officially released data, Reliance subscribers in Mumbai will have to pay a whopping Rs 297 for 1 GB of data per month.
This is the same as Vodafone’s 4G pricing, but higher than what Bharti Airtel charges (see chart on the right).
Airtel, for example, has priced its 1 GB pack at Rs 265 for 28 days.
The same price difference can be seen at the high-end as well.
While Airtel prices its 10 GB per month pack at Rs 1505 in Mumbai, Reliance is offering the same at Rs 1,857.
RCom’s 7 GB 4G pack costs Rs 1,399, which is higher than what Idea charges for 10 GB of 4G data.
Postpaid data packs are slightly cheaper, perhaps to account for the tax burden on billing plans. Here, you get 10 GB for Rs 1,500 and 1 GB for Rs 250. However, users also have to pay around 14% or so as taxes in addition to the above rates.
HIGHER THAN EXPECTED
The rates are likely to come as a shock to CDMA subscribers who have been expecting RCom to continue to offer cheap data rates compared to bigger networks like Bharti Airtel and Vodafone.
While they were on CDMA technology, these subscribers could get anywhere from 15 GB to 24 GB for around Rs 1,000 per month.
In fact, RCom used to offer 40 GB for Rs 999 plus taxes in the post-paid segment, and in some circles, even unlimited data.
PREMIUM 4G
According to our sources, RCom is going to position its data services as ‘premium’.
It will try to attract customers who are tired of overburdened wireless networks operated by its rivals such has Bharti Airtel and Vodafone in Mumbai.
Many networks in Mumbai, including that of market leader Vodafone suffer from extreme data congestion in areas such as South Bombay due to the high number of users.
RCom’s network will not face the issue of congestion in the medium term as it is more or less an empty at this time.
It currently has only those who have upgraded from CDMA to 4G and also bought 4G devices.
Even these subscribers are unlikely to cause network congestion on Reliance’s new 4G network due to the price factor. It is unlikely that many of them will consume huge amounts of data given the current pricing.
CDMA customers are considered to be the most price-sensitive category among telecom users in India. Their average monthly bill have been about 40% less than what an average GSM consumer spends.
As such, Reliance Communications is likely to target the users of companies such as Bharti Airtel and Vodafone in Mumbai as it has a key asset that these companies lack — low-frequency spectrum.
Only RCom and Reliance Jio have 4G services on low-frequency 850 MHz spectrum (band 5).
Unlike the spectrum used by companies like Vodafone and Bharti Airtel, this band has the ability to go into buildings and basements.
As a result, RCom’s new 4G network can technically provide signals even in hard-to-reach areas in Mumbai.
On the other hand, RCom has limited quantities of 4G spectrum compared to players like Bharti Airtel in Mumbai. Airtel has around 30 MHz, while RCom has only 10 MHz. As a result, Airtel can carry three times as much data per tower compared to RCom.
This means that Reliance will not be able to compete with Airtel in pricing, and for now, the company seems to have decided to compete by offering better coverage and lower congestion.
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