BSNL heats up price war, to offer free calls and cheaper data plans than Reliance Jio

Just when the Telecom segment is facing chronic heat due to a raging price war among various service providers, the state-run BSNL is planning to slash rates of both voice and data plans from January 2016. According to BSNL sources, the new zero-voice-tariff plans will be applicable from January 2016. The rates will be lower than Rs. 149 offered by Reliance Jio.

If you look at the Reliance Jio 4G plan, the free voice calling facility is applicable only to 4G subscribers. The forthcoming BSNL plans touted to be cheaper than Jio, will be thrown open to 2G and 3G customers, which constitute a major chunk of their user base.

Confirming the development, Anupam Shrivastava, BSNL chairman and managing director revealed that they are closely observing the market including the overall performance of Reliance Jio. He said that BSNL would come up with free lifetime voice plans from January 2016 as part of fresh package offerings throughout the country. Shrivastava confirmed that the new rates will be lower than the existing Jio plans and will amount only from Rs 2 to Rs. 4.

New BSNL plans will be applicable to landline customers

When asked about the availability, Shrivastava added that the company will extend the free packages not only for mobile customers but also for broadband users who make use of Landline telephones. However, the free voice facility will also be available when a subscriber uses it outside the residence.

The main aim of the company is to force consumers to make use of the home broadband to route outgoing mobile calls via the landline network. The company expects that consumers spend a large amount of time at home and hence routing landline calls to mobiles will be an effective way to catch up with the markets.

Telecom industry will suffer if BSNL slashes rates

According to industry analysts, the crowded telecom market will suffer a lot if the state-run company announces new packages since it will force operators such as Airtel, Vodafone, and Idea to slash tariffs.

Meanwhile, Prashant Singhal, a partner at Ernst & Young revealed that most probably other operators will also follow the same route. However, the latest move could be a potential risk for BSNL. He added that the Average Revenue Per User (ARPU) of the company would hit a major roadblock if BSNL offers rates similar to Reliance Jio 4G.

Even though BSNL is absent in key markets like Mumbai and Delhi, the company has a significant presence in key markets such as Kerala, Tamil Nadu, Himachal Pradesh, Haryana, Odisha, Punjab, and UP.