Reliance playing price game. Post-paid tariff reduced after pre-paid hike

Reliance Communications is playing a price game. After increasing the call rates for pre-paid users recently by 25 percent, it has come up with a relief to its post-paid customers. The telecom giant is getting prepared to cut the tariffs by 40 percent. RCOM RCom CEO Gurdeep Singh said the company wants to be disruptive in the post-paid space in the Indian mobile market, and wants to provide value position to its high-end users and corporate houses. The company will be introducing for its post-paid customers unlimited calls for just Rs 899 a month along with other revisions. Mr Singh claims the new call rates will reduce the bills by up to 60 percent. Currently there are only 5 percent post-paid customers in India out of total 950 million users, and they contribute up to 20 percent of revenues to the Industry. Data also reveals the post-paid customers’ retention figure with an operator is about four years, but that of pre-paid mobile users it is just six to eight months. For RCom the post-paid customers account to 4 percent of the total users in its GSM network and they bring revenue of 18 percent to the company. The post-paid market in the country is more than Rs 20,000 crore a year. RCom is looking to double the base of its post-paid users. Reliance is also coming up with ‘all share business plans’ similar to Verizon and AT&T in the U.S. This will facilitate paying a minimum rental of Rs 499 for corporate, SMEs or households with more than three RCom mobile connections.

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