Reliance Jio Might Not Increase Tariffs Until it Reaches 500 Million Subscribers: Analysts

Reliance Jio may continue to offer its plans in the same prices, thus hurting the chances of other rival telecom operators as per the analysts. According to an ET Telecom report, Reliance Jio continues to chase its goal of 500 million subscribers and does not seem to be putting a hold on its intensity. This move is eventually bound to have an effect on other incumbent telecom operators like Vodafone Idea and Bharti Airtel. This could also mean that Reliance Jio might not hike its tariffs any time soon.

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Reliance Jio Aiming to Hit 500 Million Subscribers

According to Rajiv Sharma, co-research head at SBICap Securities said, “We don’t see telecom tariffs improving anytime soon with Jio emphasising its aspiration for 500 million 4G subscribers, which is a negative for Vodafone Idea’s share price and will also limit any further upsides in Bharti Airtel.” The first effect of Reliance Jio’s announcement of JioFiber has shown its impact on the share prices of Vodafone Idea and Bharti Airtel. Vodafone Idea saw a decline of 6.4% to close at Rs 5.02 on Tuesday while Airtel shares fell nearly 7% in intra-day trade before closing 5.3% lower at Rs 351.65 on BSE. On the other hand, Reliance Jio’s shares went up by 10% and closed at Rs 1,275 on the exchange.

Analysts had predicted returning stability in the telecom industry and easing of the price war a few months back. However, with Reliance Jio’s continued affliction over other telecom operators, this might contradict the prediction that analysts made regarding the industry. To recall, Reliance Jio kicked off the data tariff war three years ago in 2016, and since then, it has caused the other telecom operators to bring down their tariffs and hurt their financials. It was also the reason why other small telcos exited the industry, and the sector went through a consolidation phase, leaving three telecom operators – Bharti Airtel, Vodafone Idea and Reliance Jio.