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Mukesh Ambani led Reliance Jio Infocom (R-Jio) free lifetime offer for voice calls starting as low as Rs. 149 is aimed to take away voice consumers from rival telcos Bharti Airtel, Vodafone and Idea Cellular, who derive over 70 per cent of their revenues from voice.
“We see good amount of migration happening from the current incumbents till the free period or December 31, 2016 as Indian consumer is price sensitive. Post free period, we have to see if Jio is able to retain customers as the incumbent telcos will not take it lying down and come with better offers triggering a price war,” KPMG partner Jaideep Ghosh told The Hindu.
Jio is targeting to add a million users a day reaching over 100 million users before December 31, 2016, garnering 10% of the over one billion mobile users in the country through its free offer.
Post free offer, Jio’s plan of Rs. 149 offering unlimited voice calls with 300 MB of data is aimed at churning voice customers from its rivals, who get over 70 per cent of their revenues from voice.
“With Rs 149. entry level offer, Jio’s average revenue per user (ARPU) will be much higher than the existing players as the industry average is only Rs. 125 per user, most of which comes from voice,” said Ghosh.
“We believe RJio’s launch will put pressure on voice tariffs for incumbents, who would now be prodded to roll out more bundled plans. While we are already below consensus, we cut our margin estimates for Idea and Bharti further (~150bps or 5% EBITDA cut) to factor in higher network costs, churn rates and marketing growth,” said Rumit Dugar analyst at Religare Institutional Research.
On COAI Director General Rajan S. Mathews criticism that the claim of free calls is not entirely correct as the tariffs bundle data and voice, Reliance Jio on Friday clarified that the data used for the voice calls will neither be charged nor deducted from the data balance of the subscriber.
“Domestic voice calls to any network across the country, both in local as well as while roaming nationally, will be completely free for Jio subscribers forever i.e. even beyond 1 January 2017,” said a R-Jio statement.
Jio commercial operations will roll out from January and the telco is expecting revenues between Rs. 36,000 crore to Rs. 50,000 crore in FY17-18, the first full year of commercial operations of the company. India’s largest telco Bharti Airtel reported revenues of Rs. 60,300 crore for FY16 while Kumar Mangalam Birla led Idea Cellular reported revenues of Rs. 35,816 crore.
Jio’s unlimited voice calls at Rs 149 will result in migration from existing telcos: The Hindu - Mobile edition
“We see good amount of migration happening from the current incumbents till the free period or December 31, 2016 as Indian consumer is price sensitive. Post free period, we have to see if Jio is able to retain customers as the incumbent telcos will not take it lying down and come with better offers triggering a price war,” KPMG partner Jaideep Ghosh told The Hindu.
Jio is targeting to add a million users a day reaching over 100 million users before December 31, 2016, garnering 10% of the over one billion mobile users in the country through its free offer.
Post free offer, Jio’s plan of Rs. 149 offering unlimited voice calls with 300 MB of data is aimed at churning voice customers from its rivals, who get over 70 per cent of their revenues from voice.
“With Rs 149. entry level offer, Jio’s average revenue per user (ARPU) will be much higher than the existing players as the industry average is only Rs. 125 per user, most of which comes from voice,” said Ghosh.
“We believe RJio’s launch will put pressure on voice tariffs for incumbents, who would now be prodded to roll out more bundled plans. While we are already below consensus, we cut our margin estimates for Idea and Bharti further (~150bps or 5% EBITDA cut) to factor in higher network costs, churn rates and marketing growth,” said Rumit Dugar analyst at Religare Institutional Research.
On COAI Director General Rajan S. Mathews criticism that the claim of free calls is not entirely correct as the tariffs bundle data and voice, Reliance Jio on Friday clarified that the data used for the voice calls will neither be charged nor deducted from the data balance of the subscriber.
“Domestic voice calls to any network across the country, both in local as well as while roaming nationally, will be completely free for Jio subscribers forever i.e. even beyond 1 January 2017,” said a R-Jio statement.
Jio commercial operations will roll out from January and the telco is expecting revenues between Rs. 36,000 crore to Rs. 50,000 crore in FY17-18, the first full year of commercial operations of the company. India’s largest telco Bharti Airtel reported revenues of Rs. 60,300 crore for FY16 while Kumar Mangalam Birla led Idea Cellular reported revenues of Rs. 35,816 crore.
Jio’s unlimited voice calls at Rs 149 will result in migration from existing telcos: The Hindu - Mobile edition
