Price Hikes for Indian Telcos Rain on Netflix’s Parade
Just when it looked like Netflix (NASDAQ: NFLX) had cracked the code to achieve its ambition of getting its next 100 million subscribers from India, price hikes in the country's telecom space look all set to derail its recent momentum. The streaming giant had been betting on cheap data plans offered by Indian telecom companies, which allowed it to record 700% growth over there in the last fiscal year.
The low-priced data plans offered by Indian telcos allowed Netflix to maintain premium subscription rates in India when compared to rivals. The company also went a step further to woo more Indian customers with its 199-rupees (roughly $2.80 at the current exchange rate) mobile-only monthly plan. That was a smart move considering that 65% of video content in India is consumed over mobile networks, according to video streaming provider Vuclip.
What's more, despite being expensive compared to rivals' full-featured plans, Netflix reports that the mobile-only plan's sales have surpassed its expectations. But things might take a turn for the worse now that Indian telcos have substantially hiked data rates. That's bad news for Netflix, which remains the most expensive over-the-top video streaming service provider in India.
Source Fool.com
