Jio woos Airtel's plum client RailTel away; discounts and cheap data at play

Last Updated: Wed, Nov 28, 2018 11:17 hrs
Reliance Jio (Reuters image)

Reliance Jio Infocomm, referred to as the disruption in India's telecom sector has added a fresh feather to its cap. In a latest exercise that displays Jio's prowess, Bharti Airtel has lost one of it's plum cash-cow client- the Indian Railways. With this, Reliance Jio will be servicing RailTel from the new year. Mukesh Ambani's pet project has managed to win 378,000 subscribers from the Indian Railways.

The Railways has been reported as a most-sought after account, and Airtel according to market estimates provided service to some 195,000 accounts linked to a Closed User Group (CUG). The Railways, a report says, would be billed close to Rs 100 crores per year on the Airtel network. With Reliance Jio, Railway officials expected, the bills to dip by 35%.

The Indian Railways had been Airtel's loyal customer for a good six years, but opted to bid bye after receiving a favorable deal from Reliance Jio.  

The contract with Airtel expires on December 31 this year, and the Railway Board made an announcement on November 20. The announcement said, "Fresh CUG scheme had since been finalised by RailTel and Reliance Jio Infocomm Limited has been awarded the contract to implement the scheme."

"The fresh CUG will come into effect from January 1, 2019," said the order which detailed the tariff rates to be provided by the company.

Closed User group (CUG) is a supplementary service provided by the mobile operators to subscribers who can make and receive calls from any member associated within the group. This service is applicable for SMS also.

Under the scheme, Reliance Jio, the latest entrant in the telecom market, will provide 4G/3G connections and calls will be free of charge.

The company will provide four packages to railways - one for its senior-most officials (2% subscribers) - a 60 GB plan with a monthly rental of Rs 125, a 45 GB plan at a monthly rental of Rs 99 for its joint secretary level officers (26% subscribers), a 30 GB plan at a rental of Rs 67 for Group C staff (72% subscribers) and a Rs 49 rental plan for bulk SMS.

A 25 GB plan for Rs 199 is available for Regular subscribers. Subscribers to the CUG can pay Rs 20 per GB thereafter to top up their plans. Railway employees have to pay Rs 10 for 2 GB of extra data they use and more thereafter, according to the plan worked out by Jio.

While under the present scheme railways is charged for calls outside CUG, the plan from January 1 will not do so. Also, the 3G/4G data pack in effect from next year is much cheaper than the present packs available to railways.

"While Airtel is serving around 195,000 railway subscribers, Jio will serve 378,000 personnel of the railways, and because of the increase in the numbers, we are getting a better deal from the service provider. As a result of this, we are likely to reduce our phone bill by around 35 per cent," a senior official said.

With Agency Inputs