It’s a war between Bharti Airtel and Reliance Jio

India’s two top telecom operators, Bharti Airtel and Reliance Jio, are locked in a tight competition which has triggered another round of price war in the industry. But unlike the 3G price war in 2012 or 4G price war in 2016, the new battle isn’t about who is offering the lowest price but who can sell for free and for how long. And then, there’s a revived interest in targeting the lower tier of userbase that is still using the 2G feature phones.

How it started

It all began with Mukesh Ambani-led Reliance Jio rolling out its commercial operations in September last year. Despite being a late entrant to India’s telecom space, Jio came all guns blazing with aggressive data plans, over-the-top (OTT) app ecosystem and unlimited free voice calls.

Within the first month of its launch, Jio added a whopping 16 million subscribers. Jio’s expansion was mainly driven by free usage under the Preview Offer, Welcome Offer and Happy New Year Offer – which roughly covered the initial six-seven months. Soon, rivals Airtel and Vodafone came up with similarly priced data plans to prevent their users from migrating to Jio.

Raining freebies

Airtel in March this year announced a Surprise offer, giving away free 30GB data for three months – similar to what Reliance Jio had been offering until then. Airtel next month extended the plan for another three months. Reliance, meanwhile, continued to shower freebies under its Dhan Dhana Dhan offer. Just this week, Reliance Jio announced a cashback offer on Rs 399 recharge whereas Airtel introduced a Rs 999 plan to offer 50GB data and unlimited calls. Looking at the trend, it’s highly unlikely any of these companies will be stopping these freebies.

Revived interest in low-end phones

Before the 3G and 4G-era, Indian telecom operators sold carrier-locked CDMA phones. These CDMA phones came with voice and SMS benefits. For example, RCom users could make calls and send SMSes to the same network for free. Later, the trend transformed into partnerships between telecom operators and smartphone companies to offer bundled data and voice benefits.

Reliance, earlier this year, introduced a smart feature phone called JioPhone. This strategy aimed at expanding base to feature phone users who were still oblivious to the ongoing 4G boom in the country. Not only is Jio offering free voice calls and data benefits, it’s also offering the phone for a really low price – Rs 1,500, which is also refundable after three years.