Reliance Communications has announced that it will offer nearly triple the amount of data that it offers for its 3G data plans to subscribers, under a limited period festive offer. A prepaid subscriber will get 300MB of bundled data transfer instead of 100MB, at a price of Rs 108. Postpaid subscribers will get the same plan for Rs 100.

Tariffs: Prepaid Recharge/Postpaid Rental – Data Volume and Validity

Rs 108/ Rs 100 – 300MB for 1 month

Rs 208/Rs 199 – 750MB for 1 month

Rs 408/ Rs  399 – 1.5GB for 1 month

We feel that R-Com should make these tariffs permanent. Why?

–  Ideal 3G Pricing: In our view this should be the ideal pricing for 3G, if telecom operators are really serious about driving subscriber growth. Since the time of their launch, 3G services have been unaffordable at Rs 10-Rs 15/per MB.

– Impediments: There are several factors including erratic connectivity, poor indoor coverage and absence of content & services to support it, as well as a drop in the phone’s stand-by time, that go against its mass adoption. Couple all of that with the expensive tariffs, and it becomes an unfeasible proposition, even for smartphone users. I went off 3G on Airtel poor coverage in Delhi that didn’t justify the cost. If it’s cheaper, one wouldn’t mind signing up for 3G.

– Initiating a tariff war: Reliance Communications (erstwhile Reliance Infocomm) was one of the first to offer cheaper voice tariffs, which ultimately lead to voice tariffs hitting rock bottom, benefiting subscribers and increasing competition among players. So, if R-Com decides to stick to these plans even after the festive season, we might see a tariff war in data plans.

– Most affordable private telco for 3G: With these tariffs R-Com would be the only private operator to match or even beat BSNL’s 3G data tariffs. It can then target disgruntled BSNL customers.

– BSNL is increasing tariffs: BSNL announced a hike in data tariffs, increasing the basic surfing rate from 2 paise per 10kb to 4 paise per 10 kb, according to Telecom Talk. BSNL has also reduced the bundled data transfer and the validity period for some plans, increased the cost of certain high usage plans and reduced the free data usage offered with new data card connections, and if other telecom operators increase tariffs, it would be a good opportunity to covert customers.