Here’s How Reliance Jio’s Paid Service Will Help Bharti Airtel and Idea Cellular

Reliance Jio’s move to completely end free 4G services is expected to enable incumbents Bharti Airel and Idea Cellular to contain a sequential fall in revenue in the first quarter of this financial year, according to a report by Bank of America-Merrill Lynch. However, the brokerage added that revenue growth for these incumbents ould still be some quarters away.

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Both incumbent telcos are expected to report 0.5-2% sequential dip in revenue in the April-June period against 6-7% declines during the previous few quarters, BoFA said in its note. Another brokerage Kotak Institutional Equities said that both Airtel and Idea are likely to report meaningful improvement in sequential wireless revenue, according to a report by the Economic Times.

Notably, the entry of Reliance Jio has made a significant dent in revenues of all telecom operators in the country.

Analysts said that the Sunil Bharti Mittal-led telco is expected to report an 84-86% fall in net profit in the June quarter from Rs 1,462 crore last year, while the Aditya Birla Group-led telco may post third successive quarterly loss from a consolidated net profit of Rs 220.4 crore last year. Furthermore, Airtel’s consolidated revenue may fall by about 14% from Rs 25,546 crore a year earlier.

The ET report, citing analysts, said that Airtel and Idea’s voice realisations are likely to take a hit due to higher adoption of bundled plans among prepaid customers coupled with the increasing proportion of incoming minutes.

Reliance Jio’s paid services, analysts said, is expected to “stem the fall in monthly average revenue per user (ARPU) of the listed telcos, experts see the downtrend continuing in the June quarter.”

Bharti Airtel’s monthly average revenue per unit is expected to decline 4.3% on-quarter to Rs 151, while Idea’s average revenue per unit will decline 3% sequentially to Rs 138.

Mukesh Ambani-owned Jio Infocomm on Tuesday revamped its prepaid and postpaid tariffs in the country. The telco revised the validity and data offerings of most of its packs in the higher range. Even after the revision, Jio’s plans remain aggressive in the market and are expected to continue impacting data realisation for incumbent telcos.

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1 Comment on "Here’s How Reliance Jio’s Paid Service Will Help Bharti Airtel and Idea Cellular"

 

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Nikhil
July 12, 2017 3:47 pm 3:47 PM

Joke of the day,period!!!!! THEY SHOULD CONVERT all their 2G into 4G to get into profits!!!!!

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