Reliance Jio may offer free calls beyond March 2017

Reliance Jio may offer free calls beyond March 2017
 Reliance Jio Infocomm could offer free services even beyond March 31 next year, with the top three phone companies unleashing an all-out price war against the Mukesh Ambani-owned company with similar plans that bundle free voice calls and data, analysts and industry experts said.
“Jio may decide to extend freebies a couple of months beyond March 2017 if incumbent telcos get more aggressive on 4G pricing,” Rajiv Sharma, telecom analyst at brokerage HSBC, said in a note seen by ET.

Analysts at Religare agreed that aggression by Jio’s rivals so early in the game means market share gains for the 4G entrant will not come easy, especially with the low penetration of associated handsets.

According to HSBC’s Sharma, Bharti Airtel’s latest free voice tariff plans suggest that the market leader is looking to take away the pricing lever being used by Jio to churn subscribers, a view backed by brokerage house Religare.Religare expressed surprise that Bharti had “given in to pricing so early even before Jio has started billing” and said this suggests the move was prompted by the high likelihood of Airtel customers subscribing to Jio as a second service. Airtel on Thursday started offering free voice calls bundled with 4G data as part of two aggressively priced plans for low-revenue, highvolume generating users, which have been almost replicated by Idea Cellular and No. 2 carrier Vodafone India, even as they put tariffing might on camera to retain prepaid users, who account for over 90% of their subscribers.

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Tariff moves came a week after Jio extended its free voice and data services offer till March 31, which is expected reduce data revenue and operating margins for the top three incumbents over next two quarters.

Experts said the latest bucket plans indicate that Airtel, in particular, is willing to make a sacrifice and re-adjust to lower average revenue per user (ARPU) in an attempt to hold on to customers.

HSBC’s Sharma said Airtel could see “some ARPU erosion and margin decline” if its higher-end customers move to the new Rs 345 plan that offers 1 GB of 4G data and free localSTD calls to any network, although the data limit may not be too attractive for heavy users.

  Religare does not think Bharti’s latest bucket plans would be “materially ARPU-dilutive” but said it would strategically appear that the Sunil Mittal-led telco is “willing to toe the line” on free voice calls.

HSBC said the latest bundled tariff war could further “aggravate difficulties” of GSM fringe players – Te lenor India, Aircel and Tata Teleservices – which do not have comparable data services or coverage. “We expect a rapid shift of pure 2G voice users to low-end 4G plans (offered by top incumbents), which may accelerate sector consolidation and data penetration,” Sharma said.

Brokerage Credit Suisse said the Indian market is rapidly moving to a situation of free voice calls to all networks in
Source by gadgetsnow…
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