Reliance has launched its GSM services in many parts of the country and is looking to acquire new subscribers as well as churn subscribers from the competition. The offer is on payment of Rs 25, the subscriber gets a SIM card and for 1st 90 days, he gets Rs 10/day for calling. Also, local calling within the Reliance network (CDMA + GSM) is free in the night (11 PM to 6 AM). Beyond Rs 10, the subscriber needs to pay Rs 1 per min for local calls. All STD calls are at Rs 1.5 per min.
The above tariff means that the subscriber can theoretically get the benefit upto Rs 900 over 90 days. The maximum cost for Reliance is expected to be Rs 270(@30 paise interconnect assuming all calls are made to other networks) plus the acquisition cost. There is a great possibility of this card becoming a use and throw card unless Reliance comes up with a compelling offering at the end of offer period.
Competition has already started to react with lifetime offers. The strategy is to bind the subscriber to their network. The lifetime plan is now being offered by Airtel and Idea at Rs 99 only requiring recharge of Rs 200 every 180 days. This means that the new price war has started. The consumers are in for a good time.