Reliance Jio and Bharti Airtel Withdraw Entry-Level Prepaid Plans Amid Rising Data Consumption

What's Happening?

Reliance Jio and Bharti Airtel, two of India's largest telecommunications companies, have discontinued their entry-level prepaid plans to capitalize on increasing data consumption. Jio has removed a plan costing 249 Indian rupees ($2.84) from online platforms, while Airtel has phased out its basic plan entirely. These plans offered a gigabyte of data per day for 28 days. The move reflects a shift in consumer preference towards larger data packs, driven by the widespread availability of 5G technology. Anand Kulkarni from Crisil Ratings predicts that average revenue per user (ARPU) will rise to INR220 ($2.51) this fiscal year, with monthly data usage expected to increase to 31GB or 32GB. Jio reported an ARPU of INR208.7 ($2.38), while Airtel's was INR250 ($2.85) in the last quarter.

Why It's Important?

The discontinuation of basic prepaid plans by Jio and Airtel signifies a strategic shift towards maximizing revenue from increased data consumption. As 5G technology becomes more prevalent, consumers are demanding larger data bundles, which telecom companies are leveraging to boost ARPU. This trend could lead to higher costs for consumers who rely on smaller data plans, potentially affecting affordability and access to mobile internet services. The move also highlights the competitive dynamics between Jio and Airtel, as Jio attempts to close the ARPU gap with Airtel, which currently leads the industry.

What's Next?

As Jio and Airtel focus on premium plans, consumers may need to adjust their mobile data usage habits or face higher costs. The telecom industry could see further consolidation of offerings, with companies potentially introducing new plans that cater to high data users. Stakeholders, including regulators and consumer advocacy groups, may monitor these changes to ensure fair pricing and access. Additionally, the continued expansion of 5G services is likely to drive further innovation and competition in the telecom sector.