Update 2 (June 26): Tata DOCOMO has also now followed suit and will be reducing its 2G and 3G tariff by 90% for existing and new prepaid customers from July 1, reports The Hindu.

The company informed that it will be reducing the Volume Based Charges on 2G data recharge vouchers of three denominations and a single 3G data recharge voucher to 1 paisa per 10 KB from existing 10 paisa per 10 KB. These include 2G recharges vouchers worth Rs 126 (2GB free data for 30 days), Rs 149 (2.5GB free data for 30 days) and Rs 249 (3GB free data for 60 days) and 3G recharge voucher worth Rs 255 (2GB free data for 30 days). The company also noted that this tariff will be applicable for roaming Tata DOCOMO GSM customers as well.

Update (June 21): Idea Cellular has also slashed its 2G data rates by 90% for both postpaid and prepaid subscribers in eight circles, reports PTI (via Moneycontrol). These include Tamil Nadu & Chennai, Karnataka, Kolkata, West Bengal, Assam, North East, Bihar, and Orissa circles.

The company said that these rates will be automatically applied to all postpaid subscribers from July 1, while prepaid subscribers can opt for these rates by purchasing a value recharge priced between Rs 5-10. It will be applicable on both pay as you go basis and regular data plans and will be valid for 90 days. Its not clear on how much the company plans to charge after the completion of 90 days.

Earlier (June 20): A day after Vodafone India slashed its 2G data rates by 80%, India’s largest telco Airtel has slashed its 2G data rates by 90% for all its prepaid customers in Punjab and Haryana, reports PTI (via The Economic Times). Its worth noting that this price reduction is only for prepaid customers while Vodafone had reduced data rates for both prepaid and postpaid customers.

Airtel informed that it has reduced the Volume Based Charges (VBC) on 2G data recharge vouchers of three denominations to 1 paisa per 10 KB from existing 10 paisa per 10 KB. These include recharge vouchers worth Rs 22 (125 MB free data), Rs 25 (150MB free data) and Rs 125 (1 GB free data). The company hopes that this rate reduction will increase the usage of mobile Internet among its subscribers and has also extended the validity of these vouchers, following which Rs 22 and Rs 25 voucher will offer 30 days validity and Rs 125 voucher will offer 90 days validity.

This was quite an expected move from Airtel after Vodafone slashed its data rates yesterday. A Moneycontrol report suggests that Idea Cellular is also contemplating a similar 60% to 80% data tariff cut, citing unnamed sources. We wonder if RCOM also has similar plans in the future, considering that they have been quite aggressive on rolling out various data services to its subscribers.

We also hope that telcos extend these data tariff cuts across all its operational circles, since this would lower the entry barrier for subscribers to opt for data services and then possibly migrate from 2G to 3G network depending on their usage. This will eventually result in increased data usage and more data revenues for telcos. Remember that majority of Indian telcos including Airtel, Idea, Vodafone and RCOM had reported significant increase in data usage and data revenues in the previous quarter.