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Tata DoCoMo, which became the first private operator to introduce 3G services, today announced an aggressive tariff plan that targets a substantial conversion of its 2G customers.
Under most of the plans, 3G customers will effectively pay 0.66-1.1 paisa a second for a voice call, which is roughly the same as the 1 paisa a second that Tata's 2G customers currently pay.
But they will also get between 250 MB (enough to watch 3 hours of TV) and 2GB (23 hours of TV) of data, depending on the package they buy. Price plans start at Rs 500 to a maximum of Rs 2,000 a month for mobile services.
For the first time, Tata's price plans will not differentiate between pre-paid and post-paid customers. However, there is one special plan for pre-paid customers at Rs 350 a month for 500 minutes of talk time (local and STD) and 150 MB of data.
Existing Tata customers who want to try out 3G without shifting from 2G completely can add data by forking out Rs 200 for 200 MB or Rs 500 for 650 MB. "Our pricing is competitive and we are confident the consumer will see value in the packages we are offering," said Deepak Gulati, executive president, mobility business division, Tata Teleservices.
Since the target group for 3G services ranges from mid- to high-end subscribers, Tata expects to see average revenue per user (Arpu) increase over time. "For an aggressive user, who downloads one movie every day, spends on telecom may increase by 10-15 per cent if they avail of 3G services," Gulati added.
Of course, state-owned BSNL on the other hand does not have comparable offers as it does not bundle voice and data services under one tariff. So, for instance, subscribers have to pay between 49 paise and Rs 1 a minute for a voice call. But for data usage on 3G, it charges Rs 549 for 1 GB of data.
While this may be half of what Tata charges, if you add the cost of 2,000 minutes of voice that Tata bundles its value comes to around Rs 1,000 (at 50 paise a minute). On BSNL, you have to pay additionally for this talk time.
BSNL charges also taper off as usage increases. For Rs 999, BSNL offers 10 GB. It also offers unlimited download for Rs 1,359 a month. But, again, voice is extra.
MTNL, which provides 3G services in Delhi and Mumbai, charges Rs 450 for 1 GB of data and reduces prices progressively as usage goes up. For 2 GB, it charges Rs 750 and for 25 GB, Rs 2,500.
While the Tata bundled offer looks attractive, telecom watchers say subscribers have to make a large upfront commitment for 3G every month.
After all, with Arpus in the country averaging Rs 140 a month, Tata is asking customers to commit nearly double to triple that amount for 3G. So, the promised shift of customers will also be slow, say analysts.
They also point out that Tata's 3G pricing does not offer any incentive for higher usage, which is a norm internationally. "It is strategic behaviour. They are trying to recover costs. But at the same time, it is a signal to competitors: if you are smart, you will charge the same," said Alok Shende, principal analyst, Ascentius Consulting.
"There need not be competition. 3G is not a mass market. Tata could also be testing prices and may bring them down if competitors reduce prices," Shende added.
Kamlesh Bhatia, principal analyst, Gartner, felt that taking into consideration the licence fee and spend on the infrastructure, Tata's pricing seems competitive.
Tata DoCoMo launched 3G services on Diwali in nine circles: Karnataka, Kerala, Maharashtra, Gujarat, Rajasthan, Punjab, Haryana, Madhya-Pradesh-Chhattisgarh and UP (west).
Along with packages for data usage on mobile handsets, Tata launched five plans for 3G data services, or dongles, for laptops and other devices with assured speeds up to 15 GB of data.
