Airtel: Pricing in the Cannibalisation Era and Transition to Data

Abstract

Bharti Airtel, the Indian global Telecommunications Company, witnessed one of its most challenging phases ever. Being the market leader, Airtel experienced a shift from voice to data with its data revenue proliferating. But the new entrant Jio changed the landscape of the Indian Telecom Industry by offering free services and cut throat tariff plans. With the entry of Jio, the blended (data + voice) average revenue per user declined due to low data tariff's and voice cannibalisation by data. Airtel was under pressure to retain its position as well as to come up with a pricing plan to protect its revenue. This case revolves around the future pricing strategy and plan to be adopted by Airtel to retain its market share and come up with a pricing approach and plan to counter the Jio effect of "free" voice calls. Thus, the crux of this case is based on how a market leader develops and implements a pricing strategy to counter the entry by a very large competitor that has rock bottom prices, in a context, where the leader will cannibalise its main revenue source. This case is best used as an elective for MBA program with a module on pricing or in an executive education class with a similar purpose.