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Airtel Launches Prepaid Internet Cards; Why Are Vouchers Cheaper?

logo-airtelTaking cue from Aircel Cellular, which launched and promoted the Pocket Internet as a differentiator, Bharti Airtel has launched two mobile internet recharge vouchers for its Prepaid users in Delhi & NCR. The recharge vouchers are priced at Rs. 95 for 100 MB, and Rs. 26 per 15MB. However, this doesn’t even come close to Aircel’s offer of Rs. 14 for unlimited browsing for 3 days, and Rs. 98 for unlimited browsing for 30 days.

Airtel does have a “Zero Rental GPRS” plan, for which it charges Rs. 0.30 for 50kb of download for GPRS. The cost of the Prepaid Internet vouchers work out to Rs. 0.046 for 50 kB in case of Rs. 95 for 100 MB, and Rs. 0.0846 for 50 kb plan – in both cases, substantially cheaper than the existing rates. It is also cheaper than Airtel’s Daily Download Internet plans of Rs. 10 for 3MB of data, or Rs. 20 for 8MB of data (20p per 50kb).

Issues With E-Vouchers and E-Recharge

Airtel has chosen to go with an e-voucher option – the Internet specific recharge will be done by the retailer electronically, and there won’t be scratch cards. This helps Airtel save on printing and distribution costs for Internet specific vouchers, but they will face an issue as well. Retailers prefer printed recharge vouchers because it means less involvement from them, and less time that the consumer spends standing outside his limited retail space, awaiting a recharge confirmation message. Given the margins that retailers operate on (Rs. 0.05 on a Rs. 10 recharge, last time I checked), this isn’t a good deal for them. Consumers also tend to regulate their mobile usage by buying multiple vouchers, and using them when needed. Thus, a scratch-card voucher works better for both the consumers and the retailers than an e-voucher.

Why are the vouchers cheaper than regular GPRS? Why Is GPRS more expensive than broadband?

It’s a little strange that vouchers are cheaper than the Zero Rental GPRS option that Airtel offers to consumers. My guess is that this is because with the recharge, the consumer does not use up voice minutes on the Internet, instead, is topping up her prepaid account specifically for the Internet. So this is a bonus. What’s your take on the pricing?

However, compared to regular Internet charges, GRPRS is still substantially more expensive, probably because the data usage in case of the mobile Internet is lower than the Internet, and there is price you have to pay for utilization of scarce spectrum, as well as the freedom that mobility allows. I wonder if that will change with 3G…doesn’t seem to be the case with the way MTNL and BSNL have priced their 3G data offerings.

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