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India’s leading mobile carriers are intensifying their efforts. Recently, Reliance Jio rolled out a series of higher-priced prepaid plans with extensive over-the-top (OTT) entertainment offerings, including a premium subscription to Jio Cinema, aiming to attract high-revenue users from rivals Bharti Airtel and Vodafone Idea (Vi).
Jio’s move prompted Vi to respond with a strategic tariff action, unveiling a new 365-day recharge pack priced at Rs 3,199, marking its foray into offering an annual Amazon Prime video subscription for prepaid users. This plan, featuring unlimited voice calls, 100 text messages, and 730GB of data (2GB/day), mirrors elements found in Jio and Airtel’s annual bundled prepaid plans, The Economic Times reported.
Further escalating the competition, Vi partnered with global mobile video game developer Gameloft, expanding entertainment options for its clientele.
Not to be outdone, Airtel, already maintaining a 20% tariff premium over Jio, fortified its OTT offerings. The telecom giant integrated a basic Netflix subscription into its Rs 1,499 prepaid plan, spanning 84 days and offering 3GB of data per day.
Airtel had earlier initiated significant hikes in base prepaid rates, aiming to boost Average Revenue Per User (ARPU) growth, a move echoed by its Managing Director, Gopal Vittal, who signaled readiness to lead tariff hikes if needed.
Analysts predict that Jio’s latest prepaid plans, enriched with substantial OTT benefits, particularly Jio Cinema premium, aim to narrow the ARPU gap with Airtel. Despite Airtel’s 12% ARPU advantage at Rs 203 compared to Jio’s Rs 182, both companies have witnessed steady ARPU growth over recent fiscal periods.
The preponderance of prepaid users, constituting around 95% of telcos’ user base and generating 85% of revenue, makes this segment pivotal.
Jio’s strategic shift, offering higher-priced prepaid plans bundled with enhanced OTT benefits, aims to position the company as a premier OTT platform, fostering customer loyalty in an increasingly fickle mobile user market.
