Reliance Jio introduced new postpaid plans to steal some of the subscriber churn from Vodafone Idea.
Among operators, Vodafone Idea has the highest share of the postpaid market with 43% followed by Bharti Airtel at 28%.
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The telecom arm of Reliance Industries reported a 12% jump in profit between July and September to hit ₹2,844 crore. It’s revenue also increased by 5.6% as it continued to remain the company’s shining beacon of hope with oil & gas taking a hit.
This is despite the fact that Reliance Jio introduced new postpaid plans to steal some of the subscriber churn from Vodafone Idea.It already boasts of crossing the 400 million subscriber base threshold to become the world’s first telecom major to have a base this large in a single country.
“We see limited risk to Bharti Airtel as it has managed churn well despite and 8% to 25% premium on prepaid and 50% to 60% of its postpaid subscriptions,” said Jefferies in its report.
Company
Revenue growth in July-September 2020
Jio
5.6%
Bharti Airtel
22%
Vodafone-Idea
1.2%
Owing to the cheaper prices, the growth of the company’s average return per user (ARPU) continues to slow down. Analysts believe that the hit could result in a duopoly between Bharti Aitel and Reliance Jio rather than a Jio monopoly. ”With Jio’s impending launch of an affordable smartphone in collaboration with Google, the price increase could get pushed out by another 12 to 18 months,” said IIFL Securities report.
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Reliance wants a piece of the postpaid market Over the past four years, India’s postpaid market has halved to ₹221 billion. It forms 15% of the sector’s revenues and 5% of the sector’s active subscribers. The decline has been a result of a 42% drop in postpaid ARPU to ₹357 with prepaid plans getting cheaper.
Among operators, Vodafone Idea has the highest share of the postpaid market at 43% followed by Bharti Airtel at 28%.
For Airtel, postpaid forms 5% of its subscribers and 16% of its India mobile revenues. It would take 10% churn of its postpaid subscribers would lead to a 1% dip in its revenues.
Jio’s plan is 20% cheaper than Bharti Airtel’s at entry level and offers nearly twice as much data as Vodafone Idea.
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Bharti Airtel
Vodafone Idea
Reliance Jio
Price
499
399
399
Data benefit (GB)
75
40
75
Voice
Unlimited
Unlimited
Unlimited
Content:
Telco apps
Yes
Yes
Yes
Amazon Prime
Yes
No
Yes
Disney+ Hotstar Prime
No
No
Yes
Netflix
No
No
Yes
Source: Companies, Jefferies report dated 23 September 2020
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