3G Speed At The 2G Price

Aircel Ltd. has also joined the league of operators who slashed their 3G tariffs massively. The company which is known for introducing value-for-money Internet services has decided to extend an unlimited 3G usage with its new product - Pocket Internet Smart, which will be retailed in 13 circles where the company has 3G licenses.

The 3G-plan offers an unlimited usage for a day at INR 8 (US $0.14) onwards, and includes multiple one-month packages that start at INR 128 (US $2.30), depending on the speed.

Given the cold response by subscribers to the 3G services launched almost a-year-and-a-half back, it was critical for operators to revise their tariffs in order to book significant profits. The move to slash prices was first taken by Bharti Airtel Ltd., which was followed by Idea Cellular Ltd.and Mahanagar Telephone Nigam Ltd. (MTNL). (See MTNL Joins The Race To Slash Tariffs, 2012: The Year Of 3G? and Airtel Cuts 3G Tariff By 70%.)

Estimates suggest that India today would have around 10 million 3G subscribers. Earlier in the year, a top research analyst on condition of anonymity had predicted that operators will have to lower 3G tariffs and bring them at par with 2G tariffs in order to increase the penetration of 3G. There not being much difference between the 2G and 3G tariffs will encourage subscribers to try out 3G services.

With this, operators have entered into a new tariff war where they will be competing against each other to offer cheap 3G services. The subscribers are all set to gain from this price war, yet it remains to be seen whether the operators can recover the hefty amounts they shelled out to grab 3G licenses.

Jatinder Singh, Principal Correspondent, Light Reading India