Friday, Dec 09, 2022
Premium

Last word on Indian Telecom pricing war yet to be resolved: JP Morgan

JP Morgan in an analysis says the 4G offering by Reliance Jio is gaining traction and will see its subscriber base double by the end of this year.

Reliance Jio, Reliance 4G offer, data pricing, data consumption, tariff plan, Reliance tariff plan, Commerical operation from March,Reliance Industries,Indian Teleco, Indian telecom price wars, India telecome space, 4g data tariffs, Telecom subscribers, Technology, Technology news “The company’s (Jio’s) free scheme launched in September 2016 has been extended to March 2017.( Source: PTI)

Even as the last word on the pricing war in India’s telecom space is yet to be heard, JP Morgan in an analysis says the 4G offering by the latest player Reliance Jio is gaining traction and will see its subscriber base double by the end of this financial year.

“Over the last few months, as Jio’s free offering has gathered subscribers, and more importantly, impacted data consumption on existing telcos’ networks. There has been a pricing reaction from the incumbents for their existing telecom offering especially on data,” the investment banker’s latest report said.

“The company’s (Jio’s) free scheme launched in September 2016 has been extended to March 2017. Jio has gathered around 52 million subscribers as of December-end, and the expectation is to hit 100 million subscribers by March 2017, after which the company would start billing commercially,” it said.

Speaking about tariffs, the report said while Jio has released a tariff plan — given that subscribers are not being charged for it — there are some concerns on whether the tariff plans would be adjusted lower when the actual commercial operations are launched in April 2017. JP Morgan said Jio should seek to maximize average revenue per user, than pricing go for a per-GB data offer.

Subscriber Only Stories
JK Cement’s SPSU Udaipur Launches ‘Golden Batch 2022’ In Collaboration Wi...Premium
Appendicitis in Children- A new lifestyle disorderPremium
Using evidence will create strong foundations for the future of education...Premium
Re-Defining The Tradition In Folk Art: An Art Educator’s PerspectivePremium

“To that extent, the initial price scheme launched by Jio was a positive one as the effective pack started at Rs 499 per month, although there is a lower priced plan of Rs 149 per month.”

Also Read: Reliance Jio to invest Rs 30,000 cr more to increase coverage, network capacity

“However, given the way incumbents have cut tariff plans, it remains to be seen how Jio reacts from April, when commercial operations are launched and whether we see tweaks in the currently announced pricing plans or whether Jio sticks with the announced plan,”said the report.

Advertisement

JP Morgan analysis also felt a lot would depend on how many of the existing Jio users migrate into “paying” subscribers and at what level of revenues pe user.

Also Read: Reliance Jio’s free offer is an unfair competition says Airtel Chairman

“Given the financial strength of Reliance Industries to back Jio, they could likely play the pricing game for longer. But given that most incumbents are comfortably based on financial metrics, any pricing strategy will likely be matched and thus the market share gains would be limited for RJio.”

First published on: 14-01-2017 at 03:24:10 pm
Next Story

MS Dhoni: Former India captain, wicketkeeper-batsman now bowler, watch video

Latest Comment
Post Comment
Read Comments
Advertisement
Advertisement
Advertisement
close