As you know that reliance Jio has extended the free offer until March 31, 2017. And now the analysis says that Jio might extend the free period beyond March 31 2017. We will explain how this can happen in this article.
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Rajiv Sharma, Telecom analyst at Brokerage HSBC:
“Jio may decide to extend freebies by a couple of months beyond March 2017 if incumbent telcos get more aggressive on 4G pricing”.
Analysts at Religare agreed that aggression by Jio’s rivals so early on in the game means that market share gains for the 4G entrant will not come easy, especially with the low penetration of associated handsets.
According to HSBC’s Sharma, Bharti Airtel’s latest free voice tariff plans suggest that the market leader is looking to take away the pricing lever being used by Jio to churn subscribers, a view backed by brokerage house Religare.
Airtel this week launched free offers on voice calls bundled with 4G data as a part of who aggressively priced plans for low-revenue, high-volume generating users. The same thing was done by both idea and Vodafone.
Analysis Says That Jio Might Extend The Free Period Beyond March 31 2017
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These tariff plans came out exactly one week after the extension of jio until March 31 which is expected reduce data revenue and operating margins for the top three incumbents over the next two-quarters.
Experts said the latest bucket plans indicate that Airtel, in particular, is willing to make a sacrifice and re-adjust to lower average revenue per user (ARPU) in an attempt to hold on to customers.
HSBC’s Sharma said
Airtel could see “some ARPU erosion and margin decline” if its higher-end customers move to the new Rs 345 plan that offers 1 GB of 4G data and free local/STD calls to any network, although the data limit may not be too attractive for heavy users.
Religare does not think Bharti’s latest bucket plans would be “materially ARPU-dilutive for the company” but said it would strategically appear that the Sunil Mittal-led telco is “willing to toe the line” on free voice calls.
HSBC Further,
said the latest bundled tariff war could further “aggravate the difficulties” of GSM fringe players – Telenor India, Aircel and Tata Teleservices – which do not have comparable data services or data coverage. “We expect a rapid shift of pure 2G voice users to the low-end 4G plans (offered by top incumbents), which may accelerate sector consolidation and data penetration,” HSBC’s Sharma said.
So, let’s see what happens. This is just an analysis. We can’t guarantee this thing will happen.
Src – Economic Times.
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