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Andrew Bonwick
Vice President of Product Development at Relm Insurance
Madhav Sheth
CEO of Ai+ Smartphone
Stephen Rose
CEO Render Networks
After disrupting the prepaid market, Reliance Jio’ focus has now shifted towards the postpaid market, a move which will make it a de-facto operator for consumers. Investment banking firm Jefferies has now stated that the Mukesh Ambani-led telco’s new move will surely hurt the ARPU (Average Revenue Per User) of incumbent telcos such as Bharti Airtel, Idea Cellular and Vodafone India. Already, the ARPU of telcos such as Airtel, Idea Cellular and Vodafone has come down drastically since the entry of Reliance Jio, and it now stands lower than the new entrant’s ARPU.
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Jio’s ARPU for the quarter ended on March 31, 2018, stood at Rs 137.1 subscriber per month, which is significantly higher than the ARPU of Airtel at Rs 116 and Idea Cellular at Rs 105. Already the prepaid war helped the telco to gain the upper hand in the Indian telecom industry. And the new Rs 199 JioPostpaid plan will surely give a massive dent to incumbent’s telcos ARPU as per the banking firm.
“This is at 50% discount to comparable packs by incumbents and 60% discount to postpaid ARPUs. We have been concerned on Postpaid as it contributes 20% plus of revenues. With the sharp discount launch by Jio we expect incumbents to also respond and thus expect a further decline in ARPU for Bharti and Idea. This is likely Jio’s first offer aimed at the enterprise market. Remain cautious on the sector,” the Jefferies report said.
