Vodafone Idea and Airtel have both discontinued their lowest cost tariffs

Indian telcos are discontinuing their lowest cost tariffs in an attempt to improve their wafer-thin operating margins, in what remains one of the world’s most competitive telecoms markets.

The country’s biggest telco by subscribers, Vodafone Idea, has become the latest firm to kill off its ultra-low-cost offering, discontinuing its Rs199 ($2.87) per month tariff. According to a report in the Economic Times of India, customers are being moved across to the Rs399 ($5.75) per month Nirvana tariff.

The move follows rival Bharti Airtel’s decision to discontinue all plans under Rs499 ($7.08), as it attempts to boost revenues ahead of its 5G rollout programme.

Indian mobile network operators have been existing on ultra-fine profit margins since 2016, when India’s disruptive operator, Reliance Jio, launched a raft of ultra-low cost 4G data tariffs and handsets, with the country’s telecoms market being subsequently sucked into a race to the bottom on price.

Vodafone Idea and Airtel now appear to have drawn a line in the sand, refusing to compete for subscribers in the lower end of the post-paid market.

India’s telcos are bracing themselves for the huge capital investment that their respective 5G network buildouts will demand.

Also in the news:

Reliance Jio to launch the Indian WeChat

Vodafone Idea: 50% spectrum cap will stifle 5G in India

Reliance Jio slashes 5,000 jobs in India