Jio raises prices: The end of the telecom wars?
What's the story
Jio has raised the price of its popular 399 plan. Whereas earlier, customers got unlimited calling, 1GB/day and bundled SMS for 84 days, now you will get the same for Rs. 459. Now at Rs. 399, you will get the benefits for only 70 days. This might trigger a return to stability for the volatile telecom market which was disrupted by Jio's drastically-cheap plans.
Prepaid
Not the only change in prepaid plans
That's not all. Earlier, you got 1GB/day for 56 days at Rs. 309. The plan has been removed. Now the cheapest option for prepaid users for 1GB/day is Rs. 399: a 30% increase. Moreover, compared to earlier when you got 128kbps after exhausting the daily limit, you will get only 64kbps now. Validity of the 509 plan has been cut from 56 to 49 days.
Postpaid
Similar news for postpaid users
For postpaid users, curtailed validity and a mandatory security deposit are the major changes. Compared to the earlier three-month validity, users will now get benefits for one month only. For the 309 plan, the security deposit is Rs. 400; Rs. 500 for 409 pack; Rs. 600 for 509 plan; Rs. 950 for 799 pack and Rs. 1,150 for 999 plan.
Benefits
There are a couple of positive changes for customers
To balance things, Jio has increased data for some low-value packs. For Rs. 149, you will now get 4GB a month instead of the earlier 2GB. The Rs. 509 plan will get you benefits of 2GB data/day instead of the earlier 1GB. However, data limits have been reduced for high-end plans including 999; 1,999 and 4,999; as well for other low-end plans like 19.
Do you know?
Announcement comes two days after a Goldman Sachs report
This comes days after a Goldman Sachs report predicted a 25% hike in prices. "We expect Jio to take away promotions altogether by end of FY18. Any such move in the near term would be viewed positively by investors," it had said.
Implications
What does this mean?
When Jio entered the market in September'16, it shook the industry by offering services at never-before prices. Rivals including BSNL were forced to drop rates drastically to retain customers. The industry suffered heavy losses. As Jio increases prices, others too could go back to their original plans. This could also hit Jio's customer base: it had gained 138.6mn users to become the fourth-largest telco.