BSNL’s cheaper voice-only plans could attract price-sensitive subscribers from Vodafone Idea and Airtel, putting pressure on their average revenue per user and future revenue growth.
Highlights
- BSNL’s 2G-only plans could affect Vodafone Idea and Airtel’s revenue growth.
- 2G users account for 34% of Vodafone Idea’s subscriber base and around 85% of BSNL’s subscribers.
- BSNL’s cheaper plans could attract 25–30% of Vi’s lower-paying subscribers, according to the analysis.
- The potential shift could lead to revenue dilution of less than 1% for telecom operators.
New Delhi: State-owned telecom operator Bharat Sanchar Nigam Limited (BSNL) could pose a fresh challenge to private telecom companies Vodafone Idea (Vi) and Bharti Airtel through its cheaper 2G-only plans. Analysts believe these plans may attract price-sensitive subscribers and put pressure on the average revenue per user (ARPU) and revenue growth of private operators.
According to a report by ICICI Securities, BSNL’s voice-only plans could appeal to users who primarily rely on mobile services for calling rather than internet access.
The report highlighted that 2G subscribers account for approximately 34% of Vodafone Idea’s total subscriber base, making the telecom company particularly vulnerable to competition from BSNL.
Meanwhile, around 85% of BSNL’s subscribers are in the 2G segment, giving the government-owned operator a strong presence among customers who prefer basic mobile connectivity.
Cheaper Plans Could Attract Subscribers
Analysts estimate that BSNL’s lower-priced voice-only plans could attract around 25–30% of Vodafone Idea’s lower-paying subscribers.
However, the overall financial impact on private telecom companies is expected to remain limited.
Even if a significant proportion of these subscribers migrate to BSNL, the resulting revenue dilution could remain below 1%, according to the report.
This is because lower-paying 2G customers contribute relatively little to the overall revenue generated by private telecom operators.
Impact on Airtel and Vodafone Idea
Vodafone Idea and Airtel have the largest 2G subscriber bases among private telecom operators, with around 20% of their combined subscribers in this category.
The report suggests that both companies could face some pressure if customers increasingly shift towards BSNL’s cheaper voice-only plans.
However, analysts believe the financial impact may not be severe enough to significantly affect overall revenue growth.
BSNL’s Strong Position in 2G Market
BSNL continues to maintain a substantial subscriber base in the basic mobile services segment.
According to the report, 2G users account for approximately 85% of BSNL’s total subscribers.
The introduction of more affordable voice-only plans could strengthen BSNL’s position among price-sensitive consumers.
However, analysts also noted that the Telecom Regulatory Authority of India (TRAI) has not prescribed specific pricing for bundled or standalone voice-only services.
The growing competition in the voice-only segment could influence future pricing strategies of private telecom operators as they seek to protect their subscriber bases and maintain ARPU growth.
