telecom companies
Analysts suggest that already crowded telecom market may be further affected with BSNL's offer, forcing operators such as Airtel, Vodafone and Idea to slash tariffs. [Representational Image] In Picture: A rickshaw puller speaks on his mobile phone as he waits for customers in front of advertisement billboards belonging to telecom companies in Kolkata February 3, 2014.Reuters

As Reliance Jio continues to entice consumers with tempting offers in its bid to expand its customer base, the price war between the mobile telecom companies is heating up with state-run BSNL set to cut tarrifs to better Jio's offer.

Though Jio's offers of free voice calling on its network is exclusive to those who are 4G subscribers, BSNL plans, expected to be cheaper than Jio, will be open to 2G and 3G users, which constitute the majority of mobile customers.

BSNL, the loss-making public sector unit, is absent in key markets such as Mumbai and Delhi that are instead serviced by MTNL. But it makes up for this through its significant presence in key markets such as Kerala, Himachal Pradesh, Haryana, Odisha, Punjab and UP. The company is expected to announce zero-voice-tariff plans from January and these would be lower than the Rs 149 entry price of Jio.

 "We are closely observing the market as well as Jio's performance. We will also come up with lifetime free-voice plans from the new year as part of fresh offerings. We plan to be even lower than the Jio plan, and this could be by Rs 2-4." Anupam Shrivastava, BSNL chairman and managing director, was quoted saying by Times of India.

BSNL's plan was said to be for mobile customers who also have a broadband connection at home, but Shrivastava clarified that that the free-voice facility will also be available when a subscriber uses it outside the residence.

"The idea is to use the home broadband to route outgoing mobile calls through the landline network. We estimate that a large amount of time is spent at home, and so here we can ride on our wire-line operations," he said.

Analysts suggest that the already crowded telecom market may be further affected by BSNL's offer, forcing operators such as Airtel, Vodafone and Idea to slash tariffs.

"Others will also have to follow suit. But this can be a risk for BSNL and its ARPU(Average Revenue Per User) can be hit." Prashant Singhal, partner at Ernst & Young, said.

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