Indian state-owned service provider Bharat Sanchar Nigam Limited (BSNL) claims around 250,000 new subscribers, who have switched to its network from private telcos because of recent price hikes, according to media reports.
In total, BSNL has reportedly gained 2.5 million new subscribers since private telcos announced the price hikes, including those switching from them. Last month, all three private telcos, Reliance Jio, Bharti Airtel and Vodafone Idea, announced rate increases of 10% to 15%. India is an extremely price-sensitive market, and even a nominal increase can push subscribers to switch providers.
Post the tariff hike, the minimum 28-day voice and data plan starts at INR199 (US$2.37) for Bharti Airtel and Vodafone Idea and INR189 ($2.25) for Reliance Jio. On the other hand, BSNL’s similar plans start at INR108 ($1.2), thus offering significantly lower costs compared to private telcos. BSNL has not announced any increases in prices.
Even though the price increase by private telcos is coming after two years, several price-conscious users have ported to BSNL. Most of the subscribers who have ported from private telcos are likely to be prepaid and low-Average Revenue Per User (ARPU) subscribers, and are unlikely to contribute significantly to BSNL’s revenue. Even so, it will help BSNL gain momentum as it moves closer to launching 4G services. More than 90% of India’s subscribers are prepaid subscribers. For this reason, private telcos may not be too keen to retain these customers. Specifically, Airtel has been focusing on premium customers only.
This is a welcome development for BSNL, which has been struggling to stem the exodus of subscribers from its network because of the delay in launching 4G services. The launch of 4G services will further help the service provider gain market share. BSNL’s 4G services have been delayed inordinately because the government mandated that the service provider use indigenously developed 4G technology.