Reliance Jio Infocomm may again extend its free voice and data services beyond March 31 next year, as telcos like Bharti Airtel, Vodafone India and Idea Cellular get more aggressive on 4G pricing and try to match the Mukesh Ambani-led telco’s offers in India.
Rajiv Sharma, telecom analyst at brokerage HSBC, in a note seen by ET, said that Jio may decide to extend freebies by a couple of months beyond March 2017 if incumbent telcos get more aggressive on 4G pricing.
Reliance Jio recently extended free services offer through its Happy New Year offer, which comes with free voice service and 1 GB 4G data per day, along with access to Jio’s suite of digital applications. Incumbent telcos have quickly answered the move by launching aggressively priced packs to offer unlimited voice calls with bundled 4G data for their respective prepaid subscribers.
Brokerage Religare’s analysts said that the “aggression by Jio’s rivals so early on in the game means that market share gains for the 4G entrant will not come easy.”
Analysts said that leading telco Bharti Airtel’s latest free voice tariff plans suggest that it looking to take away the pricing lever being used by Reliance Jio to churn subscribers. The latest offer by Airtel has taken these analysts by surprise for replying to Jio’s voice calling offer so early, considering the latter hasn’t started charging its customers in India.
A Religare analyst said that Airtel’s offer suggests the move was prompted by the high likelihood of Airtel customers subscribing to Jio as a second service.
Also read: Is Jio’s entry urging its rivals to focus more on combo plans?
Industry watchers have earlier predicted that Jio’s move to extend free voice and data services offer till March 31, may negatively impact data revenue and operating margins of the top three incumbents over the next two quarters.
The latest bundled tariff war could further intensify the difficulties of Telenor India, Aircel and Tata Teleservices, which are usually referred as GSM fringe players, given they don’t have comparable data services or data coverage.
