Regulator TRAI has ordered telecom operators to offer short-duration voice-and-SMS plans without data. For someone who barely uses the internet on their phone, that sounds overdue. For an operator trying to earn more from each customer, it raises the less welcome question of how much of the current recharge that customer can now decline.

The earlier rule required at least one voice-and-SMS-only option, but operators offered a limited selection concentrated in longer-validity packs. Those were of little use to customers who recharge frequently or cannot pay several months upfront. The new TRAI rule requires options matching bundled plans with validities of 30 days or less, a plan renewable on the same date each month, and at least one longer-validity option. 

The question for telecom investors is whether companies can preserve revenue as they give low-data customers a practical way to spend less. The answer will depend partly on the discounts operators offer and partly on what customers give up when they choose a cheaper plan, something no tariff card can show.

Discount Dilemma
Customers should not have to pay for data they cannot use or do not want. That is the force of the Telecom Regulatory Authority of India’s case, particularly for feature-phone owners and people who use their phones mainly for calls. A lower-priced plan with a familiar recharge cycle would make the choice real rather than merely compliant. 

Yet using very little data is not the same as having no need for it. Someone might go days without opening an app, then need a connection for an online recharge or a payment while away from Wi-Fi. The data allowance can be valuable as a fallback even if most of it goes unused. The savings on a voice-only plan must therefore be weighed against the inconvenience and possible cost of getting connected later.

Reliance Jio made that argument in its submission to TRAI. It warned that a customer attracted by a cheaper plan could discover too late that it cannot support UPI, app-based services or online recharges without another source of internet access. Jio also reported thousands of queries about existing no-data plans, including from elderly and rural customers wanting some data. Those are Jio’s claims, not independently verified evidence, and the company has an interest in defending bundles. Still, Jio has a point. A cheaper plan may prove costly the first time its buyer needs data.

TRAI has given operators room to answer through price. Its draft proposed a “largely proportional” reduction when data was removed; the final rule calls for an “appropriate” reduction. If the saving is tiny, few customers may move, and the reform may do little for household budgets. If it is substantial, more could leave bundled packs. Neither price gap will reveal the precise cost of supplying data. It will reveal what operators are willing to charge for the choice. 

Revenue Question
For investors, the first risk is lost revenue from customers switching to cheaper plans. Morgan Stanley estimates that Airtel’s wireless revenue dilution would remain below 1% even if 25–30% of the relevant entry-level group moved to plans priced 15–20% lower. That is a broker’s scenario for one company, not an industry-wide forecast. It could be wrong if customers switch in greater numbers or operators set larger discounts. 

The longer-term test is more interesting. Operators have used bundles to make the entry-level recharge feel generous and to bring customers into mobile data. A voice-only choice could interrupt that path. Equally, customers who try a data-free pack might find occasional access worth paying for and return to a bundle or buy a top-up. A one-off change in recharge revenue says little about which behaviour will persist.

Operators could make the choice less stark by offering small-data packs and straightforward top-ups alongside voice-only plans. The commercial opportunity is to serve different needs without making an occasional internet user pay for more than they want. Whether that works profitably depends on how many customers sign up and keep spending, not the number of new packs displayed on an app. 

The rule may also matter differently to an operator’s earnings and its share price. Modest revenue dilution need not overturn a growth case. But if investors expect sustained increases in what customers spend, evidence that entry-level users are trading down could still challenge those expectations. Conversely, a negligible switching rate would weaken the argument that bundled data was a serious burden for most customers.

Once the tariffs arrive, watch how much customers save against comparable bundled packs, how many switch and whether they later buy data separately. That will show whether TRAI has eliminated an unwanted charge or simply brought the next recharge forward.

The saving is not much of a saving if it comes with another recharge.