data prices

Telecom Industry Analysis: Data Prices

Data prices have always been the reason why many people refrained from using internet on their phone. However, thanks to Reliance Jio, this barrier has been broken down.

Consumers paid an estimated Rs. 225 for 1GB of data till Q2 of 2016. Major telecom industry giants like Airtel, Vodafone and Idea enjoyed a market share of ~60%. In September of 2016, Jio officially launched their services to the general public. Users simply had to register for a SIM card, and could enjoy high-speed 4G internet along with calling, SMS and Jio Apps for a period of 3 months.

Because of Jio’s rather controversial entry, consumers now paid an estimated Rs. 125. Jio’s services, of course, remained free till March 31. After which, consumers paid around Rs. 15 per GB of data used. This is still lower, around ten times lower, than what the competition had to offer.

Now while consumers did pay Rs. 99 for their Jio Prime Membership in addition to the Rs. 303 (this price was later increased), the whole deal was definitely worth every penny. Plus, the Jio Prime Membership subscription gave the user access to a bevy of additional services.

When Jio started monetizing their services, Airtel and Vodafone (Idea merged with Vodafone, so we will count them as one) launched a similar plan in which the user paid a flat fee of approximately Rs. 346 (this offer was given to select users chosen by the service provider) and enjoyed 28GB of data for 28 days along with free calling. This move meant that Jio finally had some competition, but more importantly, consumers benefited because of data prices that were way lower than what they paid before.

Despite efforts from competitors, Jio still managed to gain a conversion rate of 67% (percentage of people who chose to pay for the Prime membership) with 108 million users and a leading 39% market share. Why? Because Jio offered better speeds and Jio Apps. Consumers got far better value, and this is evident from the numbers.

To summarize, Jio has been a boon even to those who do not use their services. This is because had it not been for Jio’s penetration strategy, consumers would still be paying around Rs. 225 for just one GB of data, if not more. This has now reduced to around Rs. 125 per GB in case of services providers other than Reliance Jio, and Rs. 15 for Reliance Jio.

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Also read: Jio Prime vs Airtel vs Vodafone vs Idea: Which one is best?