Bharti Airtel’s Smartphone Bundling Offer is Better than Reliance Jio’s Feature Phone Offer: Deutsche Bank

By October 13th, 2017 AT 10:41 AM

Airtel recently announced its affordable 4G Smartphone in partnership with a domestic mobile company Karbonn. Under the offer, Airtel is charging an upfront payment of Rs. 2,899 and subscription to a Rs. 169 per month tariff plan. After three years, customers receive a refund of Rs. 1,500 and retains the phone at the end of 36 months implying an effective cost of Rs. 1,399.

Airtel 4G Karbonn Mobile

In contrast, the JioPhone offer consists of a Rs. 1,500 upfront payment and subscription to a Rs. 153 per month plan. At the end of 36 months, the customer gets a cash refund of Rs. 1500 but has to return the phone to Jio implying zero cost for using the handset. Both the tariff plans are comparable and offer unlimited voice and 0.5GB/day of data for 28 days.

A report of Deutsche Bank now says that Bharti Airtel’s offer is a timely one and it would accelerate subscriber additions of the company. The Indian telecom market is rapidly consolidating with three remaining weak players struggling to retain subscribers. At end of July 2017, Airtel had an active subs-share of 26.6% (271.5m) which compares 15.2% of the weaker operators.

“We believe Bharti’s handset bundle would aid in garnering a significantly higher share of the subscribers who are likely switch over the next 12-18 months. We also note that Bharti’s current ARPU (1QFY18) stands at Rs154 and hence the current offer is unlikely to be dilutive. It is likely that the offer has an element of handset subsidy of around Rs1000 ie Rs 28/month over the offer period (36 months). This implies an effective ARPU of Rs 141/month which is higher than Bharti’s current voice ARPU of Rs 111/month,” said Deutsche Bank in its report.

Furthermore, it stated that Airtel has an advantage in providing the overall 3G/4G experience to the consumers because it has a smartphone under its belt, while on the other hand, JioPhone is a feature phone with a 2.4-inch QVGA display.

The Indian telecom industry is currently undergoing some huge changes. After the entrance of Reliance Jio, there have been three exits and two ongoing mergers, which places Bharti Airtel in an advantageous position said the report. “It could increase its rev-share by c400bps to 35% over the next 18 months. It would be driven by its acquisition of Telenor’s operations and potential subscriber gains from weaker players, concluded Deutsche Bank.

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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