Postpaid Segment Emerges as New Battleground for Indian Telecom Operators

Published by
Bala Yogesh

ICICI Securities in a report on Wednesday said that the new postpaid tariffs unveiled by Reliance Jio on Tuesday will have “multiple ramifications” for Reliance Jio as well incumbents. According to the firm, the plans unveiled by Reliance Jio, while offered at similar level of tariff as incumbents, largely have the benefits of three major over-the-top (OTT) platforms. Reliance Jio, the largest telecom operator in India on Tuesday unveiled JioPostpaid Plus plans in multiple tiers in the range of Rs 399 to Rs 1499. The JioPostpaid Plus plans offer an array of benefits including a complimentary access to Netflix Mobile subscription, Amazon Prime membership and Disney+ Hotstar VIP subscription.

Postpaid Services Emerge as New Battleground for Telecom Operators

Further, the base JioPostpaid Plus tariff priced at Rs 399 is 20% cheaper than the base tariff offered by Airtel with identical data benefits.

“We see the offering having potential to drive at least some churn from incumbents, unless they match the OTT offers,” ICICI Securities said in its report on Wednesday. “Matching of the offering, on the other hand, could result in additional annual costs to Airtel and Vodafone Idea (VIL).”

The firm said that a “large chunk” of connections in the postpaid segment “is driven by corporate connections” across the country.

“Thus, response of non-corporate segment will be key to churn,” ICICI Securities

said in its report.

The Telecom Regulatory Authority of India (Trai) in a report highlighted that the prepaid services accounted for 95.35% of the total connections for the quarter ended March 31, 2020. The report released by Trai in mid-September also highlights that the average revenue per user (ARPU) in the prepaid segment hit Rs 84 during the quarter ended March, 2020. However, Trai said that the postpaid segment registered an ARPU of Rs 244 for the quarter ended March, 2020.

Vodafone Idea and Bharti Airtel Could Match Offers Provided by Reliance Jio

CLSA, a capital market and investment group in a research note highlighted that the postpaid subscribers are “key to operators’ ARPU.” The firm said that the ARPU growth in the segment “presents opportunities” for Airtel, Vodafone Idea and Reliance Jio.

Crucially, CLSA said that the incumbents can match the offers provided by Reliance Jio as the OTT benefits offered by the largest telecom operator in India are largely restricted to single screen.

ICICI Securities also highlighted that Vodafone Idea and Airtel already offer Amazon prime one year subscription with the postpaid connections. However, the firm said that the Airtel and Vodafone Idea will have to make “incremental spending” for Netflix and Disney+ Hotstar VIP subscription.

Bala Yogesh

Born in India, Yogesh loves to travel and has lived in multiple countries including New Zealand and Canada. His bylines can be found on various newspapers and blogs throughout the world, including Vancouver Sun, Surrey Now-Leader, Daily Hive , Investing News Network and Rach F1.

Published by
Bala Yogesh

Recent Posts

Reliance Jio Is Offering Rs 6,000 Worth of Vouchers With OnePlus Nord CE 5G

Reliance Jio has a habit of partnering up with companies and smartphone brands to offer…

June 20, 2021 2:35 pm

Here’s Why 100 Mbps Plan Is Good for You

As users of technology, our reliance on the internet has seen a steep upward trend…

June 20, 2021 10:00 am

BSNL Offers a Better 90 Days 4G Plan Than Jio

Reliance Jio and BSNL both offer a 90 days 4G prepaid plan to their customers.…

June 20, 2021 7:03 am

After MLA, CAIT Secretary-General Asks for Ban on BGMI India

Ever since Player Unknown's Battlegrounds or PUBG was banned in India back in 2020, the…

June 19, 2021 9:53 pm

Samsung Eyes on European 5G Market to Expand Network Equipment Business

The South Korean multinational entity Samsung Electronics is eyeing at Europe to retain growth pace…

June 19, 2021 8:40 pm

The Samsung Galaxy Z Fold 2 Won’t Be Discontinued Just Yet

The flagship market has been quite stagnant in recent months, given how the S21 series…

June 19, 2021 8:30 pm