Airtel, Vodafone, Idea to wait before increasing tariff like Reliance Jio. Here’s why
Jul 13, 2017, 12:33 IST
Reliance Jio recently revised its tariff plan and put in a competitive price of Rs 309 for users.
This move may prompt top telecom operators such as Bharti Airtel, Vodafone India and Idea Cellular to increase their tariffs too.
However, they are in no hurry to do so as Mukesh Ambani is expected to launch 4G VoLTE feature phone in the market and the telcos want to see the impact.
Even if the telecom operators increase the prices, they are likely to maintain a gap of 15-20% in prices compared to Reliance Jio.
"We expect incumbents to follow suit in raising effective prices but leave a 15-25% price gap with Jio, although such announcements could only be made after Jio's feature phone launch,” brokerage UBS said in a note.
Meanwhile, Ambani-led Reliance Jio may launch a 4G feature phone priced at Rs 500. If this goes through, Ambani will shake up the feature phone market.
"Any stabilisation in retail tariffs is helpful for the industry. However, it would be premature to say the price wars have come to an end. The market is still hyper competitive and it will take another three to four quarters to determine if real price stability has returned,” said Rajan Mathews, director general of the Cellular Operators Association of India (COAI), told ET.
Harsh Jagnani, sector head at ICRA told ET, "Jio is now focusing on pushing up ARPU to improve its profitability after amassing more than 100 million subscribers.”
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This move may prompt top telecom operators such as Bharti Airtel, Vodafone India and Idea Cellular to increase their tariffs too.
However, they are in no hurry to do so as Mukesh Ambani is expected to launch 4G VoLTE feature phone in the market and the telcos want to see the impact.
Even if the telecom operators increase the prices, they are likely to maintain a gap of 15-20% in prices compared to Reliance Jio.
"We expect incumbents to follow suit in raising effective prices but leave a 15-25% price gap with Jio, although such announcements could only be made after Jio's feature phone launch,” brokerage UBS said in a note.
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"Any stabilisation in retail tariffs is helpful for the industry. However, it would be premature to say the price wars have come to an end. The market is still hyper competitive and it will take another three to four quarters to determine if real price stability has returned,” said Rajan Mathews, director general of the Cellular Operators Association of India (COAI), told ET.
Harsh Jagnani, sector head at ICRA told ET, "Jio is now focusing on pushing up ARPU to improve its profitability after amassing more than 100 million subscribers.”