Millions of Indians, many of them in rural areas, are waking up to using the Internet on their mobile handsets thanks to recent price cuts in data plans by leading operators such as Bharti Airtel, Vodafone and Reliance Communications (RCom) - and easy-use schemes that encourage trial consumption.
And the entry of Mukesh Ambani's Reliance Jio into 4G services is only likely to fuel the competition further, say industry watchers.
Bharti Airtel for example reported more than 80% rise in its video downloads in July compared to March. Around 22 million videos were downloaded from its Airtel Live store in July against 12 million in March. What is interesting is that close to 50% of the users were from rural areas, thanks to a simplified tariff plan under which the company in May introduced downloads for as low as of Re 1.
"We felt a strong need for simplification of the vocabulary through which people related to mobile Internet - stepping away from the GBs and MBs and talking to customers in the language of content, product and services that they identify with. With this in mind, we launched '`1 video downloads,'" said N Rajaram, CEO, data services, Bharti Airtel. "The service saw over 22 million users leveraging the mobile Internet experience, of which 50% were from rural India."
Reliance Communications (RCom) also reported a similar rise. For example, Internet traffic on RCOM's network grew by 14% in the April-June period over the previous quarter.
"RCom broke the 3G entry barrier by offering 3G at 2G prices and it is beginning to impact usage patterns and trigger a spike in 3G usage. Aggressive pricing is ensuring greater traction from mid-to-high level customers," said Gurdeep Singh, president and CEO of RCom's wireless division.
Companies are also focusing on services in areas where they do not have 3G spectrum.
"In non-3G circles, we are offering high-speed data access on our CDMA network," said Singh.
Airtel's R1 download package is applicable for both 3G and 2G subscribers. 2G subscribers use GPRS for video downloads.
Vodafone also reported 42.2 million users of data services as on June 30, 2013, constituting 26.6% of its total subscriber base. Its smartphone user penetration grew to 9% of the total subscriber base in June 2013, a 95% increase compared to June 2012. "This is mainly due to reduction in tariff by up to 80%,"a Vodafone spokesperson said.
Experts feel incumbent operators have to be prepared for the proposed launch of Reliance Jio's 4G services.
"If existing telcos have to compete with Rel Jio on data services, it is necessary for incumbent operators to reduce their tariffs so that existing subscribers are hooked onto them," said BK Syngal, former chairman and managing director, VSNL.