Reliance, Bharti slug it out in prepaid cards

The slow down in the gro
27 August 2004

When the going gets tough, the tough lower their prices. The leading players in the mobile prepaid card segment lock horns in a bid to stay 'on the line'

The slow down in the growth rate of additional mobile subscriptions — in both code division multiple access (CDMA) and global system for mobile (GSM) players — in the first half of the year has led to an all out price war in the mobile prepaid card segment.

The main players slugging it out to garner a greater market share as well as ensuring higher growth of the large prepaid segment in cellular phones are Bharti Cellular and Reliance Infocomm. And it won't be long before other players join in the slugfest.

Last month, on August 14, Reliance Infocomm launched its 'Independence Day Special' offer by reducing prepaid tariffs by 40-60 per cent, and therefore doubling the talk time available, compared to other competing prepaid services. Reliance cut its pre-paid tariffs by 60 per cent for calls within its own network (to other Reliance subscribers, both mobile or FWT/FWP) and by 30 per cent for calls to other GSM, CDMA and landline users. The changed tariffs mean that a Reliance to Reliance call will cost 99paise per minute, while calls to other mobiles and landlines will cost Rs1.79 per minute compared to the Rs2.49 per minute to mobiles and Rs2.99 per minute to landlines, charged earlier.

RIM prepaid customers can also roam on new home tariffs across India. When roaming, outgoing calls will be charged at home tariffs of Rs1.79 per min. SMS will be charged at Re1 within the circle and Rs2 for national messages. The R-Connect tariff for Internet access will remain unchanged at Re1 per minute, while voice mail retrieval is charged at reduced home tariff rates of 99paise.

Price warrior Bharti Cellular has responded by announcing price cuts while Idea Cellular a few days earlier announced price cuts in its prepaid segment.

AirTel has slashed local call tariffs by 60 per cent to Re1 per minute and STD rates by 30 per cent to Rs 2 per minute within its own network (AirTel-to-AirTel only) for prepaid users. New AirTel prepaid users will also get free airtime worth Rs50 on the first recharge. The recharge will, however, have to be for a minimum of Rs324 and will have to be availed of within a period of 96 hours of purchase. Already mobile STD calls from AirTel phones anywhere in India are lower than STD calls made from a fixed line phone.