Reliance Jio's new data plans may give breather to Airtel, other rivals in price war

 BT Online   New Delhi     Last Updated: July 12, 2017  | 16:35 IST
Reliance Jio's new data plans may give breather to Airtel, other rivals in price war

Mukesh Ambani-led Reliance Jio on Tuesday reduced the validity of its postpaid and prepaid plans, effectively cutting down the 4G data offered with them and providing a minor breather to bleeding rivals in the relentless price war.

The company's Rs 309 prepaid plan, which earlier offered 84 GB data for 84 days with a daily cap of 1GB, will now come with 56 GB data for 56 days with a Fair Usage Policy of (FUP) 1 GB per day. Similarly, its Rs 509 prepaid plan will also be valid only for 56 days compared to the earlier 84 days, which means a subscriber will get 112 GB compared to the earlier 168 GB for the same price. The latest entrant in the telecom sector has made similar changes in the postpaid segment as well.

The Rs 309 plan, which earlier offered 90 GB data with three months validity and a cap of 1 GB per day, will now come with reducing its discounts and raising implied tariffs which would be directionally positive for India's largest telecom company Bharti Airtel and the country's telecom sector as a whole.

As Jio began handing out freebies to customers when it debuted in September 2016, telcos have been reeling under losses. Bharti Airtel reporting its lowest quarterly earnings in four years as its net earnings fell 72 per cent in January-March. Younger brother Anil Ambaniled Reliance Commmunication is straddled with Rs 44,000 crore net debt.

It has seven months to make repayments and the younger Ambani has said he will clear Rs 25,000 crore dues by September 30. The sector's total debt is Rs 4.5 lakh crore, while revenues are half of this. It posted huge losses in the last quarter of 2016-17, reportedly hurt by the intense price war unleashed by Jio. 60 GB data and two months validity.

The Rs 509 plan will now offer 120 GB data as opposed to 180 GB earlier. The tariff revision comes as the maximum allowed 90-day period for Jio's promotional offers, which were launched on April 11, ended on July 9. Jio has also introduced two new postpaid and prepaid plans for Rs 349 and Rs 399 each. In its latest report, Bank of America Merill Lynch said Jio is reducing its discounts and raising implied tariffs which would be directionally positive for India's largest telecom company Bharti Airtel and the country's telecom sector as a whole.

As Jio began handing out freebies to customers when it debuted in September 2016, telcos have been reeling under losses. Bharti Airtel reporting its lowest quarterly earnings in four years as its net earnings fell 72 per cent in January-March. Younger brother Anil Ambaniled Reliance Commmunication is straddled with Rs 44,000 crore net debt. It has seven months to make repayments and the younger Ambani has said he will clear Rs 25,000 crore dues by September 30. The sector's total debt is Rs 4.5 lakh crore, while revenues are half of this.

It posted huge losses in the last quarter of 2016-17, reportedly hurt by the intense price war unleashed by Jio.

Youtube
  • Print

  • COMMENT
A    A   A
close