Reliance jio tariff rate hike will open scope to price hike for Airtel, Idea,vodafone:- We all know that the tariff rates of all the popular plans of Reliance jio is increased and now another sad news for all the Airtel,Vodafone,idea prepaid customers, They also can now increase their tariff rates of their unlimited plans. Reliance jio has increased 4g unlimited plan rates by 15% to 20% last week.
“The price increases are positive for the sector and incumbents, who had generally followed Jio’s prices in the past six months and will now likely be able to raise prices as well,” Swiss brokerage UBS said.Jio’s decision to double the data allowance on its lowest Rs 149/month pack to 4GB signals its efforts “to increase the value proposition of low-end plans since higher prices could drive churn in the more price-sensitive segments”, UBS said in a note seen by ET. The move reflects the Mukesh Ambani-run telco’s emerging focus on retention rather than purely customer acquisitions, it said.
Jio has raised effective rates of some popular plans. In the case of its Rs 399 plan, for instance, it reduced the validity to 70 days from 84 days. For enjoying 84-day benefits, Jio has introduced a new Rs 459 plan.
The development is a big positive for Airtel, Vodafone and Idea as Jio have been disrupting the market since its launch in September 2016 through first free and then rock-bottom data rates and free-for-life voice calls across the country, forcing older operators to slash rates to retain users at the cost of severe financial pressure. Now, these incumbents have some leeway to increase rates.Deutsche Bank said Jio’s pricing trends “suggest a progressive normalisation of sector pricing, which was significantly impacted by its free launch offer in September 2016”.
The German investment bank said the continuation of aggressive pricing though would “pose a significant risk for Jio as incumbents have been successful in rolling out 4G services and defending their revenue share through calibrated offers” to counter the newcomer.UBS, in fact, expects “sector ARPUs (average revenue per user) to bottom in FY18, and grow by 3% in FY19 and 5% in FY20 in its base case”.
Also read:-Reliance jio's latest new unlimited 4g plans launched on 19th october 2017
Kotak Institutional Equities said Jio’s decision to increase the validity period of its larger recharge packs – Rs 1,999 and Rs 4,999 – maybe the newcomer’s “attempt to make some dent into the upper echelons of incumbents’, especially Bharti Airtel and Vodafone’s, subscriber base”.At present, only “a miniscule proportion” of Jio’s near-140 million customers are on such high-value plans, and “this segment has generally continued to spend bulk of their wireless spends with the incumbents”, the brokerage said.
Jio customers opting for the Rs 1,999 pack will now get it for six months instead of the earlier 120-day quota while those going for the Rs 4,999 pack will enjoy a year’s validity instead of the earlier 210 days.The new entrant recently caused a flutter in the market by reporting a strong average revenue per user (ARPU) of Rs 156.4 in the fiscal second quarter, which was higher than Rs 154 recorded by market leader Bharti Airtel in the April-June period.
Jio had posted a net loss of Rs 270.59 crore for the quarter to September on revenues of Rs 6,147 crore and had surprised analysts and sector experts by reporting positive earnings before interest and tax (EBIT), helped by strong user additions and cost efficiencies. The company had said it expects its ARPUs to rise further as it gradually reduces freebies.Analysts expect Jio to post a net profit in the next fiscal year, basis strong user additions and robust ARPU levels. One brokerage – Nomura – expects Jio to report a net profit in the current October-December quarter itself.you also like to read our previous post Reliance Jio's 399 plan now offers Unlimited calling and internet data with 70 days Validity(New plan) 2017
They expect Jio to add another 42 million customers in the second half of FY18, taking its overall base to 181million by March 2018 and to 205 million by March 2019, from its present level of 139 million as of September end, backed by both smartphone and JioPhone subscriber growth.
 |
| Reliance jio tariff rate hike will open scope to price hike for Airtel, Idea,vodafone |
“The price increases are positive for the sector and incumbents, who had generally followed Jio’s prices in the past six months and will now likely be able to raise prices as well,” Swiss brokerage UBS said.Jio’s decision to double the data allowance on its lowest Rs 149/month pack to 4GB signals its efforts “to increase the value proposition of low-end plans since higher prices could drive churn in the more price-sensitive segments”, UBS said in a note seen by ET. The move reflects the Mukesh Ambani-run telco’s emerging focus on retention rather than purely customer acquisitions, it said.
Jio has raised effective rates of some popular plans. In the case of its Rs 399 plan, for instance, it reduced the validity to 70 days from 84 days. For enjoying 84-day benefits, Jio has introduced a new Rs 459 plan.
The development is a big positive for Airtel, Vodafone and Idea as Jio have been disrupting the market since its launch in September 2016 through first free and then rock-bottom data rates and free-for-life voice calls across the country, forcing older operators to slash rates to retain users at the cost of severe financial pressure. Now, these incumbents have some leeway to increase rates.Deutsche Bank said Jio’s pricing trends “suggest a progressive normalisation of sector pricing, which was significantly impacted by its free launch offer in September 2016”.
The German investment bank said the continuation of aggressive pricing though would “pose a significant risk for Jio as incumbents have been successful in rolling out 4G services and defending their revenue share through calibrated offers” to counter the newcomer.UBS, in fact, expects “sector ARPUs (average revenue per user) to bottom in FY18, and grow by 3% in FY19 and 5% in FY20 in its base case”.
Also read:-Reliance jio's latest new unlimited 4g plans launched on 19th october 2017
Kotak Institutional Equities said Jio’s decision to increase the validity period of its larger recharge packs – Rs 1,999 and Rs 4,999 – maybe the newcomer’s “attempt to make some dent into the upper echelons of incumbents’, especially Bharti Airtel and Vodafone’s, subscriber base”.At present, only “a miniscule proportion” of Jio’s near-140 million customers are on such high-value plans, and “this segment has generally continued to spend bulk of their wireless spends with the incumbents”, the brokerage said.
 |
| Reliance jio tariff rate hike will open scope to price hike for Airtel, Idea,vodafone |
Jio customers opting for the Rs 1,999 pack will now get it for six months instead of the earlier 120-day quota while those going for the Rs 4,999 pack will enjoy a year’s validity instead of the earlier 210 days.The new entrant recently caused a flutter in the market by reporting a strong average revenue per user (ARPU) of Rs 156.4 in the fiscal second quarter, which was higher than Rs 154 recorded by market leader Bharti Airtel in the April-June period.
Jio had posted a net loss of Rs 270.59 crore for the quarter to September on revenues of Rs 6,147 crore and had surprised analysts and sector experts by reporting positive earnings before interest and tax (EBIT), helped by strong user additions and cost efficiencies. The company had said it expects its ARPUs to rise further as it gradually reduces freebies.Analysts expect Jio to post a net profit in the next fiscal year, basis strong user additions and robust ARPU levels. One brokerage – Nomura – expects Jio to report a net profit in the current October-December quarter itself.you also like to read our previous post Reliance Jio's 399 plan now offers Unlimited calling and internet data with 70 days Validity(New plan) 2017
They expect Jio to add another 42 million customers in the second half of FY18, taking its overall base to 181million by March 2018 and to 205 million by March 2019, from its present level of 139 million as of September end, backed by both smartphone and JioPhone subscriber growth.
Reliance jio tariff rate hike will open scope to price hike for Airtel, Idea,vodafone
Reviewed by Shan Paul
on
October 22, 2017
Rating:
Reviewed by Shan Paul
on
October 22, 2017
Rating:
No comments: