Marketing Strategies / Strategic Marketing Case Study

Airtel vs. Reliance: Indian Telecom Giants Price War

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Abstract:
India's largest private telecom player, Bharti Airtel Ltd reduced their STD and roaming charges across all mobile tariff plans in April 2008. This price cut benefited all pre- and post-paid mobile subscribers who were paying more than the above rates for their national long-distance calls. Immediately after Airtel's tariff-cut, another telecom giant in India, Reliance Communications came out with unlimited free STD calls for all Reliance to Reliance mobile phone connections and new Reliance Mobile customers across post-paid, pre-paid and its 'Hello' fixed wireless phone customers. Later, other telecom players such as Vodafone, BSN, etc, followed the trend. The competitive pricing strategies adopted by the Indian telecom players reflected an emerging price war in the Indian telecom industry. Will the price war impact the telecom market and will the industry be able to sustain amidst such pricing pressures?

Pedagogical Objectives:

• To comprehend the pricing trends in the Indian telecom industry.
• To analyse the impact of price cuts on the telecom markets and on the industry.
• To discuss the sustainability of the price-cut strategy.

Keywords :  Indian telecom industry, Telecom service providers, Airtel Mobile, Reliance Communications, Telecom pricing, Mobile tariff cut, Prospects and challenges - price cut