Reliance Jio has recently launched the postpaid plan with Rs 199 with all free services, such as free voice calls, free SMS, free roaming, and free international roaming services. The trade analysis says that the postpaid plan from Reliance Jio might lead to the tariff wars.
“The move could lead to another brutal tariff cut in the post-paid regime, hurting incumbents further: Jio’s post-paid tariffs are sharply lower compared to the current tariff plans offered by incumbents,” JP Morgan said in its report.
Reliance Jio Postpaid Plan of Rs 199 May Lead To Tariff Wars: Report
Jio has launched the postpaid plan on Thursday and this plan will be accessible to subscribers from 15th May. Under this plan the ISD Calling is accessible with just 50 paise per minute.
“International tariffs offered by Jio are quite competitive and we could see downward pressure on such tariffs for incumbents. However, even in a scenario where we assume 10-15 percent of postpaid revenues are from international calls, and international tariffs get cut by 50 percent, the impact on overall revenue of incumbents is likely to be less than 2 percent,” A report states.
The Jio’s lowest monthly post-paid plan was Rs 309 at present, while from 15th May it will be Rs 199. Clients selecting Rs 199 won’t require paying any security store and they will get an unlimited free voice, SMS and 25 GB data at 4G speed. The organization also reported international roaming service with active calls at Rs 2 every moment onwards.
CLSA analyst Deepti Chaturvedi and Akshat Agarwal in their report said 5 percent of industry supporters are on post-paid service. Post-paid subscribers albeit restricted to 5-6 percent for Bharti Airtel and IdeaVodafone, represent around 20 percent of their portable income, the CLSA report said.
“Jio’s Rs 199 per month post-paid tariff plan is a sector negative and will delay the Arpu recovery for the sector,” CLSA said.
As per Morgan Stanley, the new plans of Jio focusing on post-paid clients may affect 1 for every penny of Airtel’s mobile revenue in the event that the telecom real tries to match the tax.
“…running a sensitivity analysis on whether Airtel were to match the Rs 199 tariff, for every 10% of the postpaid subscriber base that downgrades its tariff plan, the impact on Airtel’s Indian wireless revenue would be 1 per cent,” Morgan Stanley report said.