Data Costs Are Coming Down But Interest Rates Are Not, Air India’s Turnaround Plan And Other News

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Gearing Up: Ahead of the much-awaited launch of Reliance’s 4G Jio services, competitors Airtel and Idea have cut their data tariffs by two-thirds to retain customers. The third big player, Vodafone, may also announce a cut in coming days. Jio’s services are expected to launch in the next six to eight weeks and competition is bracing itself for the onslaught. Not surprisingly, the price cuts have been focussed on the prepaid customer - traditionally the most fickle. The thing to watch, however, is how long these tariffs will stay. All telcos, including Reliance are strapped for cash after paying the highest ever fees for spectrum licenses last year, and telecom watchers believe that data costs may fall only 15-20 percent at the most.  Still good news for the consumers, though.

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Quality checks: As the mobile industry readies itself for big changes, the telecom regulator wants to keep an eagle eye on service quality. Last month, TRAI conducted a drive test of all telecom services in the capital, in which all companies failed the call drop test. The telcos questioned the findings, leading to a fair bit of back and forth between the two. To prevent this kind of situation from coming up once more, TRAI is doing what it does best: consultation. A new  discussion paper on mobile service quality is expected soon, to keep the conversation on data and voice quality going.

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No cuts coming: RBI Governor Raghuram Rajan has confirmed what analysts have been saying for the past week: rates will not be cut in the next policy. Inflation numbers released last week remain high, and the impact of the expected good rains is yet to be seen. When asked if the RBI was behind the curve on cutting rates, here’s what Rajan said:

“This discussion keeps going on without any economic basis...You have to tell me that somehow inflation is very low for us to be seen as behind the curve.”

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Indian Post’s payment bank is moving ahead, with the postal department calling for bids to manage its back-end technology operations. A total of 15 companies are interested, including the usual suspects Wipro, Infosys and IBM. It’s a decent-sized order - 5-7 billion rupees to set up its back end and manage it for five years. It will take a couple of months for the winner to be announced, but this order may well be worth the wait.

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Air India’s turnaround plan: The government-owned airline wants the government to back 105 billion rupees of debt it plans to raise to pay pack higher cost bank loans, as part of its plans to repay higher interest loans. This and other cost cutting plans may well help the Maharaja turn cash positive in the next fiscal year, two years earlier than predicted. Not to forget the unexpected bonanza brought by the drop in aviation fuel prices. (Pic: Financial Express)

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Kashmir remains on the boil, as protestors clashed with the police after the militant posterboy Burhan Wani was killed 10 days ago. Since then 41 people have been killed, 2000 injured and a curfew imposed in the valley has reached its 10th day today.

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Cover Image: The monsoon session of Parliament begins today and GST remains on top of the priority list. Prime Minister Narendra Modi called an all-party meeting yesterday where he pushed to clear it in this session, but the main opponent of the bill, the Congress party has reserved comment.

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