After a spate of consolidation, there was some confidence that India's telcos would be able to increase tariffs this year. Indeed, India's Reliance Jio, the country's newest and most aggressive network operator, had itself raised prices in October.

But any hopes about further increases are quickly evaporating. Since the start of the year, RJio has announced two tariff cuts as well as a new plan for JioPhone, the low-cost feature phone it launched in 2017.

Besides including more data in popular packages, Reliance Jio is now offering unlimited voice plans to JioPhone users, as well as a 1GB data allowance, for just 49 Indian rupees ($0.76) every 28 days. It had previously offered a similar smartphone plan giving users a 2GB data allowance for a 28-day fee of INR98 ($1.52).

"While average revenue per user (ARPU) at the upper strata are capped (INR300-400 [$4.67-6.22]), there is a potential to improve them at the lower strata by data adoption in the un-penetrated segment," says a recent research note from India Ratings and Research. "65% mobile subscribers were voice-only subscribers in September 2017 according to Telecom Regulatory Authority of India. As tariff wars spread to this segment to capture a significant market share, industry ARPU recovery could become more challenging."

To further unsettle the incumbents, RJio says it will reduce tariffs by another fifth whenever a rival matches its offer. In fact, the recent cuts might have happened because the incumbents had started to recover and even gain ground in the final quarter of 2017. Airtel's market share had nearly returned to the 25% level seen before RJio entered the market in late 2016.

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RJio's moves should certainly help to expand India's data market. Ultimately, the operator hopes to go beyond urban areas and acquire customers in smaller towns as well as India's countryside. Many of these would be first-time users. Much like their global counterparts, Indian telcos have typically focused on the urban markets at the expense of rural areas. While teledensity in cities is more than 100%, it languishes at around 55% in the rural zones.

RJio had been able to acquire more than 160 million subscribers by the end of 2017. Most of its customers, however, still use it as a back-up connectivity provider, and not their main telco. That makes the acquisition of first-time subscribers a crucial part of RJio's strategy.

For more on RJio's disruption of India's communications market, see:

— Gagandeep Kaur, contributing editor, special to Light Reading