3G Tariff wars in India; BSNL plans to slash 3G Internet rates by 50%

Government carrier BSNL to cut 3G Internet rates by 50% by June 2015

In a move which is bound to trigger a 3G Internet tariff war between the carriers, the state-run telecom giant BSNL is likely to cut its 3G data rates by at least 50% however the rate cut will only come once BSNL completes its next phase of network expansion.

“We estimate that 3G data rates can be reduced by at least 50 per cent compared to prevailing rates under phase 8 of our network expansion,” BSNL Chairman and Managing Director Anupam Shrivastav told PTI in an interview.

At present the rates offered by BSNL are equal to that being offered by other private players i.e. it gives its customers 1 GB of 3G mobile internet service for Rs 175 and 2GB for Rs 251.

“We have utilised over 90 per cent of 3G capacity. If we reduce tariff right now, there can be sudden increase in traffic and network may not be able to bear the load. Once we expand this capacity to handle adequate traffic under phase 8, we will reduce rates,” Shrivastav said.

The new slashed tariff which will be at half the rate of what it is offering now, will be applicable when BSNL completes phase 7 network expansion plan. The expansion plan will cost BSNL about Rs 4,800 crore ($1 billion approx) and is expected to be completed by June this year.

BSNL also said that it will start working on phase 8 network expansion plan and expects to start issuing tender for this phase in the first quarter of financial year 2015-16. Under Phase 8, BSNL has plans to integrate wifi hotspots that it is rolling out in 2,500 cities and towns with 3G by end of next year to increase network capacity.

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