Idea follows Bharti in slashing 3G rates

Dylan Bushell-Embling
23 May 2012

Bharti Airtel's aggressive 3G tariff cuts appear to have already sparked a new round of price competition in India.

Rival Idea Cellular has cut its base 3G rates for both pre-paid and post-paid customers by 70%, Times of Indiareported. This is the same percentage as Bharti Airtel's reduction in base 3G rates first announced last week.

Both operators are now offering rates just of 3 paisa ($0.0005) per 10kb of data in usage-based plans.

Idea has also introduced a new time-based plan charging 10 rupees ($0.18) per 30 minutes of browsing - again the same price as Bharti Aritel is now charging for a similar plan.

Vodafone India has separately revealed that the company is preparing price changes for its own 3G plans, but has yet to provide details.

Analysts predict that these tariff reductions to be just the tip of the iceberg, with other 3G service providers likely to feel compelled to follow suit at least with certain tariff plans, according to India Today.

While price cutting may provide the stimulus needed to boost 3G adoption in the market, Indian operators are already struggling with some of the lowest ARPUs in the world.

Operators providing 3G services also racked up huge debts paying for 3G spectrum during the 2010 auction, and these debts are further impairing their profitability.

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