Vodafone slashes 2G data rates to lure more into net

To be applicable in all circles in phases

Six months after it increased 2G data prices, Vodafone India today decided to slash these charges by 80 per cent — from 10 paise to 2 paise for 10KB — in Karnataka, west Uttar Pradesh, Madhya Pradesh and Chhattisgarh circles. The new rates will be rolled out across India in phases. “The rate cut from 10p/10KB to 2p/10KB will make Internet access affordable for customers who use mobile internet in a limited way,” Vodafone said in a statement. The new rate would be applicable for both pre-paid and post-paid customers using 2G network on a ‘pay as you go’ basis in these circles.

“We, at Vodafone, want to accelerate mobile internet adoption. This 80 per cent reduction in data charges for customers using 2G network is an important step in this direction,” said Vodafone India chief commercial officer Vivek Mathur. Vodafone has reduced the price for customers who are not regular data users. “In ‘pay as you go’, consumers pay as and when they use. Clearly, the company is trying to get fresh data users with the rate cut. However, some existing customers may switch to the new data tariffs,” said an analyst with a management consulting firm.

Vodafone has 37.3 million data users in India, of which 3.3 million are 3G subscribers as of March 31, 2013. Bharti Airtel, India’s largest telco by subscriber base, has 43 million data users, of which six million are 3G subscribers. During the quarter ended March 31, 2013, Vodafone’s data revenue increased 50.5 per cent to Rs 2,000 crore, which is seven per cent of its overall revenue.

Bharti Airtel’s data subscribers rose 22 per cent during the quarter and its data revenue per user increased 25 per cent. It gets 6.5 per cent of total revenue from data. In January this year, Bharti Airtel, Vodafone and Idea Cellular had increased the rates for 2G data, which contributes about four per cent of their revenues, by 25 per cent, while keeping 3G prices unchanged to reduce the gap between 2G and 3G rates.  At present, market leader Bharti Airtel offers 1 paisa for 10KB rate in select telecom circles for pre-paid 2G customers, bundled with certain data plans. It also offers 3 paise for 10 KB rate for 3G users in specific data plans in some circles. Also, in a few circles, the charges are high as 10 paise for 10KB, according to the company’s website. Idea Cellular and Aircel charge 10 paise for 10 KB.

As part of its strategy to democratise data, Vodafone is educating current and potential users about how Internet can add significant value to them. The company is also building content partnerships, simplifying pricing, educating retailers and offering choice to customer basis their interests and consumption patterns.

Recently, Aircel, Idea Cellular and Vodafone India introduced low-cost internet packs. Vodafone is India’s second biggest telecom service provider by subscriber base.
THE LEADERS

• Vodafone's total data customers in India-37.3 million, of this 3.3 million are 3G customers
  Total subscriber base – 152 million
  Data revenue – 7 per cent of total revenue
  Growth rate in data revenue – 50.5 per cent
• Bharti Airtel’s total data users In India – 43 million, of this 6 million are 3G users
  Total subscribers – 188 million
  Data revenue – 6.5 per cent of total revenue

(All figures are till March 31, 2013)
* Source – company balance sheets