Airtel Hikes 2G Rates: Vodafone and Idea to Follow Suit

One of India's leading telecom service providers, Bharti Airtel has recently been in the news for a change in its data plan rates. The company has decided to hike rates for its 2G data plan by a whopping 25%. The change is confined to Airtel's 1GB plan alone. Notably, this is the most expensive of the company's six data plans.

In a bid to increase revenue and cut back costs, the company has also commenced cutting down on other perks that were previously offered for free to its customers. Airtel CEO Sanjay Kapoor recently declared that service costs for voice as well as data services will have to increase in order for the telecom industry to sustain itself. In addition, improving existing technologies and generating returns for shareholders largely demand an increase in revenue.

This move by Bharti Airtel has lead to speculation that other major players such as Idea and Vodafone will follow suit and hike up their 2G rates as well. As per officials from Vodafone India, there has been a substantial boom in the 2G market. This is largely due to the low tax as well as the existence of a huge array of feature phones.

This trend is absent only in rural India where data plans are not yet popular. Per a reliable source, 2G data accounts for 3-4 % of revenue for the telecom industry. Hence this calculated move by Airtel seems to be crucial to the telecom industry at this juncture.

It remains to be seen how the general population will respond to this move by Airtel particularly if other providers are expected to follow the trend. Customers are left wondering how long it would be before the trend applies to other high-end data plans as well.