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NEW DELHI: After raising call rates for pre-paid users by a steep 25 per cent, Anil Ambani promoted Reliance CommunicationsBSE 0.87 % (RCOM) has decided to play the price game in the post-paid segment, and will introduce tariffs that are 40 per cent lower than those offered by GSM operators, a top executive in the company said.
"We want to be disruptive in the post-paid space which is dominated by the three incumbent GSM operators due to historical reasons. These operators have not brought any innovations or reduced tariffs for their post-paid customers over the last decade. These are high-end users and corporates and we know they are open for to a value proposition. Pricing disruption will be one way to target these subscribers," RCOM's chief executive Gurdeep Singh told ET.
RCOM will soon introduce unlimited voice calls for 899 for its post-paid customers while this option will be available along with 3 GB of data for Rs 1,499. The company's existing post-paid customers will also be given the option to migrate to these new tariffs. Company executives claim the new call rates would reduce bills of high-end post-paid users by up to 60 per cent. At present, post-paid customers account for a mere 5 per cent of the 950 million mobile connections in India, but these customers contribute up to 20 per cent of the total revenues of the sector. On an average, these customers stay with an operator for three to four years when compared to six to eight months for the pre-paid category.
In the case of RCOM, post-paid users constitute about 4 per cent of its GSM customers and bring about 18 per cent of its revenues from this technology platform. The telco wants to double its post-paid base over the next 12 months. India's post-paid market is estimated to worth over Rs 20,000 crore annually. India's telecom sector has been ravaged by savage price wars over the last three years, destroying profitability of the sector and leading to stagnation of revenues, but this has been largely restricted to the pre-paid segment.
Last week, RCOM had carried out its biggest ever tariff hike when it began revising its base price from 1.2 paise per second to 1.5 paise, its second bold step after the debt-ridden telco disconnected customers who had not used their phones for two months, resulting in its subscriber base declining by 21 million. "We believe tariff hike by RCOM indicates that the company is focusing more on profitability and moving away from being competitive," analysts at Goldman Sachs had said in a September 21 note to their clients.
After raising prepaid charges, Reliance Communications to lower tariff in post-paid segment - The Economic Times
"We want to be disruptive in the post-paid space which is dominated by the three incumbent GSM operators due to historical reasons. These operators have not brought any innovations or reduced tariffs for their post-paid customers over the last decade. These are high-end users and corporates and we know they are open for to a value proposition. Pricing disruption will be one way to target these subscribers," RCOM's chief executive Gurdeep Singh told ET.
RCOM will soon introduce unlimited voice calls for 899 for its post-paid customers while this option will be available along with 3 GB of data for Rs 1,499. The company's existing post-paid customers will also be given the option to migrate to these new tariffs. Company executives claim the new call rates would reduce bills of high-end post-paid users by up to 60 per cent. At present, post-paid customers account for a mere 5 per cent of the 950 million mobile connections in India, but these customers contribute up to 20 per cent of the total revenues of the sector. On an average, these customers stay with an operator for three to four years when compared to six to eight months for the pre-paid category.
In the case of RCOM, post-paid users constitute about 4 per cent of its GSM customers and bring about 18 per cent of its revenues from this technology platform. The telco wants to double its post-paid base over the next 12 months. India's post-paid market is estimated to worth over Rs 20,000 crore annually. India's telecom sector has been ravaged by savage price wars over the last three years, destroying profitability of the sector and leading to stagnation of revenues, but this has been largely restricted to the pre-paid segment.
Last week, RCOM had carried out its biggest ever tariff hike when it began revising its base price from 1.2 paise per second to 1.5 paise, its second bold step after the debt-ridden telco disconnected customers who had not used their phones for two months, resulting in its subscriber base declining by 21 million. "We believe tariff hike by RCOM indicates that the company is focusing more on profitability and moving away from being competitive," analysts at Goldman Sachs had said in a September 21 note to their clients.
After raising prepaid charges, Reliance Communications to lower tariff in post-paid segment - The Economic Times
