India’s biggest telecom operator Bharti Airtel has come out with a free data offer to woo new and existing customers. Airtel’s new offer comes in the wake of intensifying competition in the telecom sector after Reliance Jio’s entry last September.
Under Airtel’s new scheme, which was announced on Tuesday, the telecom operator said that it would offer 3GB of free 4G data per month until the end of the year to customers who switch to some of its plans from other carriers and to existing customers who upgrade to 4G by February 28.
Airtel’s plan is open for both prepaid and postpaid options.
The 12 months offer is available to any customer with a 4G mobile handset that is currently not on the Airtel network. Any customer, including existing Airtel customers, upgrading to a new 4G handset can also avail this offer, Airtel said.
For prepaid customers, Airtel offers unlimited calling (both local and STD) to any network and 1 GB of 4G data for Rs. 345. Customers switching to Airtel 4G under the new offer will now get free local and STD calls and 4GB data.
Postpaid customers with any 4G mobile handset who are not on the Airtel network or upgrading to a new 4G device will now get 3GB free data per month, with all MyPlan Infinity plans.
However, Airtel’s new offer has sparked concerns that intensifying competition will hit profits and margins in the sector. Commenting on Airtel’s new free data offer, global brokerage Morgan Stanley said ongoing tariff wars are a big concern. The disruption in the telecom sector is likely to continue because of Jio’s aggressive entry and the telecom industry is likely to remain challenging, it added.
Another global brokerage Citi, commenting on Airtel’s offer, said that the revenue of telecom companies per unit of data services provided is likely to drop further.
Kotak Securities in a January 2 note had said that “a combination of negatives in the form of demonetisation and Jio’s free services is likely to result in fairly dismal 3Q FY17 earnings prints for Bharti and Idea”.
Meanwhile, in Wednesday’s trading session, Bharti Airtel shares ended 3 per cent higher at Rs. 314.