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    Airtel, Voda Idea fall 5% each after Jio rolls out new postpaid plans

    Synopsis

    Brokerage Kotak Securities said two key areas where Jio’s plans scored over Bharti’s and Vi’s are that the entire content bundle is available across plans, coupled with Netflix.

    Jio unleashes new tariff war, ramps up offerings in postpaid segment to target high paying Airtel, Vi users
    Kolkata: Bharti Airtel and Vodafone Idea (Vi) shares fell sharply in Wednesday's trade, a day after Reliance Jio rolled out postpaid tariff plans, making a concerted bid for the higher paying subscribers of India's older operators.

    Bharti Airtel shares were down nearly 4.5% at Rs 448.95 while Vi’s stock was trading nearly 5.3% lower at Rs 9.71 on Bombay Stock Exchange (BSE).

    Analysts said Jio’s move could potentially trigger another round of price competition as most of such postpaid users are with Bhati Airtel and Vi. Jio’s new monthly post-paid tariff plans range from Rs 399 to Rs 1,499, while Airtel’s postpaid plans start at Rs 499, though Vi’s also begin from Rs 399.

    Brokerage Kotak Securities said two key areas where Jio’s plans scored over Bharti’s and Vi’s are that the entire content bundle is available across plans, coupled with Netflix. “Jio’s entry plan is also Rs 100 cheaper than Bharti’s, and while Vi’s is priced at the same Rs 399, it offers lower data allowance (40 GB) than Jio,” said the brokerage in a note.

    Just over four years since its launch in September 2016, Jio, on Tuesday, unveiled a gamut of offerings for post-paid users, which include family packs and access to OTT platforms, a first from the telco which so far almost entirely focussed on prepaid customers. It is also offering in-flight connectivity for Indian travellers going overseas, free international roaming in the US and UAE, besides other offers.

    Some analysts, however, believe that Mukesh Ambani-led Jio will find it far more difficult to poach historically stickier post-paid subscribers from its two incumbent rivals, given that mobile phone users already have access to a variety of content and large dollops of data.

    Jio’s new post-paid tariff plans come at a time when both Vi and Airtel have been talking of the need to raise prices urgently to repair the telecom industry’s financials. Jio is the only profit-making telco in India.

    Until now, Reliance Jio, which had just one postpaid plan at Rs 199, had concentrated largely on the prepaid category of customers, who account for well over 90% of the telecom subscribers in India. For example, some 94.8% of Bharti Airtel’s around 280-million user base is made up of pre-paid customers, while it is 92.3% for Vi, out of a user base of under 280 million.

    The post-paid segment, though, contributes over 25% to the industry’s revenue, as it brings in higher average revenue per user (ARPU) - a key metric. Jio has an ARPU of Rs 140 compared with Vi's Rs 114 and Airtel's Rs 157.
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    1 Comment on this Story

    Nuraj Bakshi29 days ago
    Good good very good, if Pio gives me 2 years plan free I am ready to switch to Pio from Airtel
    The Economic Times