With 5G services set to roll out to a few regions in October, all eyes are now on the pricing strategy by the telecom operators. And based on analysts and industry sources, the pricing of 5G services may not be too different from 4G services in India.
According to a report by ET Telecom, Reliance Jio and Bharti Airtel will be launching their respective 5G services in October. The tariff plans for 5G will likely be at a similar range of 4G services. The publication, citing industry sources and analysts, claimed that launching 5G services at a similar pricing will help with mass adoption of the next-generation technology.
While 5G has launched at a premium in other countries, in India, telcos are unlikely to raise the prices too much in the early days. The strategy would be to entice the present 4G user base to migrate to a 5G network. Once there is a critical mass of early adopters, however, telcos may choose to raise the prices, having created a differentiated user base. This won’t happen any time soon though, as the 5G smartphone user base is still just around 16% of the entire mobile population, according to Sunil Bharti Mittal of Airtel.
5G Services Pricing In India
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The report cites a few examples and analysis to drive home the point that 5G services in India should not be too pricey at the start, in a bid to drive mass adoption. “5G operators are unlikely to charge a premium over 4G rates initially as their immediate goal would be to drive 5G adoption, get more consumers to experience faster speeds, consume more data and, in turn, drive ARPU growth,” said Rohan Dhamija, India head at Analysys Mason, in an interview with ET.
He cited the example of the UK, where after launching 5G services at a premium, telcos had to drive the prices down to improve adoption. A top executive at an Indian telecom also said that premium pricing could be a potential turn-off for users. “Consumers even in urban markets won’t pay a premium unless the 5G value-add is significantly more than current 4G data offerings,” the executive told ET.
5G Services Rolling Out In October, But Only In Select Circles
5G networks from Jio and Airtel will launch in October, but will only be available in a few circles. While Jio and Airtel have talked about an October launch, Vodafone Idea does not have a firm timeline for its launch of 5G services. Reliance Jio announced during its AGM that its standalone 5G network, dubbed True 5G will roll out by Diwali. Meanwhile, Airtel CEO Gopal Vittal said the service will launch in a month.