Vodafone India have announced that they will provide customers with another free increase in 4G data allowances in an attempt to defend its customer base as a ‘price war’ ensues in the country.
A report published by The Economic Times suggest that Vodafone India is preparing to offer customers four-times the data allowance currently provided on many of its 4G plans. This is the latest in a number of marketing gimmicks by the company in an effort to stem off competition from rival competitors.
In January, the operator began selling a ‘super-hour’ of unlimited data for a set price. This was an extremely popular promotion, but it sparked a reaction from other operators and it has subsequently led to what industry analysts have described as a ‘price war’ following the emergence and launch of new entrant Reliance Jio.
At their launch, Reliance Jio declared it would offer free calls, messaging and data to new customers until the end of 2016, with domestic calls remaining free after the expiry of the initial deal.
After adding 600,000 customers per day in its first three months of operation, the free offer was extended until the end of March, but capacity issues mean customers are limited to 1GB high speed 4G before having their data rate reduced.
In response, India’s three largest operators – Bharti Airtel, Vodafone and Idea Cellular – began offering free additional data on selected plans. Airtel provided customers upgrading to a new 4G handset 3GB of free data per month for the first year of their contract, while Idea boosted existing customer allowances with additional free monthly data. Prior to its January offers, Vodafone had doubled its data allowances on some tariffs.
However, this ‘price war’ is having a severe impact on Vodafone’s financial performance. The company was forced to write down the value of its Indian unit by €5 billion due to the increased and intense competition. Vodafone India also took the decision to put a long-awaited IPO in the country on hold until at least its 2017 to 2018 fiscal year – which covers the period to the end March 2018.
At a half yearly trading meeting, CEO Vittorio Colao admitted they had experienced issues throughout the year , but said the company responded accordingly by strengthening our data and voice commercial offers.
In addition to this, he also revealed that the company was focusing its spectrum acquisition investments to the most successful and profitable areas of the country.