Post #1: Reliance Jio’s Rs 199 post-paid plan likely to trigger tariff war, say analysts

Jio on Thursday announced a new post-paid plan starting from with monthly rental of Rs 199 and an ISD calling service at a starting price of 50 paise per minute.

“International tariffs offered by Jio are quite competitive and we could see downward pressure on such tariffs for incumbents. However, even in a scenario where we assume 10-15 per cent of postpaid revenues are from international calls, and international tariffs get cut by 50 per cent, the impact on overall revenue of incumbents is likely to be less than 2 per cent,” Goldman Sachs said.

The subscription of the Jio’s Rs 199 plan will start from May 15. At present, the lowest monthly rent of Jio post-paid plan is Rs 309.
Customers opting for Rs 199 will not require to pay any security deposit and they will get unlimited free voice, sms and 25 GB data at 4G speed.
The company also announced international roaming service with outgoing calls at Rs 2 per minute onwards.
CLSA analysts Deepti Chaturvedi and Akshat Agarwal in their report said 5 per cent of industry subscribers are on post-paid service.
Post-paid subscribers, although limited to 5-6 per cent for Bharti Airtel and IdeaVodafone, account for around 20 per cent of their mobile revenue, the CLSA report said.
“Jio’s Rs 199 per month post-paid tariff plan is a sector negative and will delay the Arpu recovery for the sector,” CLSA said.
According to Morgan Stanley, the new plans of Jio targeting post-paid customers may impact 1 per cent of Airtel’s mobile revenue in case the telecom major tries to match the tariff.

Comments

  1. VIDYASAGAR May 13, 2018 at 8:08 am

    Ok

  2. Rahul Dev May 13, 2018 at 8:11 am

    Jio is the killer company who will kill the other telecom company

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