Reliance Jio Offers The Cheapest Tariffs

Mukesh Ambani's Reliance Jio Infocomm Ltd. offers the cheapest tariffs after the latest cut as it looks to win users and market share from older rivals, data compiled by BloombergQuint show.

The company on Friday said it cut charges by Rs 50 on four of its prepaid plans, besides introducing four new ones that offer 1.5 gigabytes of data a day. The new tariffs are effective from Jan. 9.

The country's newest telecom operator unleashed a tariff war in the world's second largest telecom market after offering free services for the first six months starting September 2016, followed by cut-rate data plans. Revenues and profits of rivals declined as they matched lower tariffs, driving consolidation. That latest cuts came after Bharti Airtel Ltd. and Idea Cellular lowered pricing on certain plans.

Reliance Jio's primary focus is market share and not near-term profitability, Credit Suisse said in a report. Its ambition, according to Morgan Stanley, is to accelerate subscriber addition.

Comparison With Peers

Its latest cut has brought down tariffs by 10-25 percent, according to BloombergQuint's calculations. The new plans it introduced are also 20-33 percent cheaper than earlier. That makes its tariffs the cheapest, data show.

Reliance Jio offers data at Rs 4.7/5.3 a GB on plans with a validity of 28 days. That compares with Rs 6.2-7 charged by its peers.

For higher validity plans, its pricing is as low as Rs 3.6 a GB compared to Rs 5.5 charged by its competitors—a premium of 53 percent.

Also Read: Mukesh Ambani's Reliance Jio To Buy RCom's Spectrum And Towers

Watch this interview with Mahesh Uppal, telecom analyst and director of Com First India on tariff wars in the telecom industry.