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Jefferies: Jio’s Sharp Discount Postpaid Offer May Hit ARPU of Other Players

The report further said postpaid churn is lower and it is believed that shift to Jio will be gradual

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Jio’s sharp discount postpaid offer may hit ARPU of other players.
Jio’s Sharp Discount Postpaid Offer May Hit ARPU of Other Players. IANS

A day after Reliance Jio announced its postpaid offer at Rs 199, global investment banking firm Jefferies on Friday said the sharp discount launched by Jio would make incumbents respond to it which may further cut average revenue per user (ARPU) for Bharti and Idea.

Jio on Thursday launched a new postpaid plan at Rs 199 offering 25GB of data and unlimited voice and SMS. It is also offering international roaming rates of Rs 2/min for voice, Rs 2/MB for data and Rs 2/SMS. It also offers Rs 500/day roaming pack with Unlimited voice/data/SMS. The subscription will start from May 15.

Jio
Jio (Wikimedia Commons)

“This is at 50 per cent discount to comparable packs by incumbents and 60 per cent discount to postpaid ARPUs. We have been concerned on Postpaid as it contributes 20 per cent plus of revenues. With the sharp discount launch by Jio we expect incumbents to also respond and thus expect further decline in ARPU for Bharti and Idea. This is likely Jio’s first offer aimed at enterprise market. Remain cautious on the sector,” the Jefferies report said.

“We have been concerned on the postpaid revenues for incumbents given the cost to consumers is 3x of prepaid. Postpaid while making up only 7 per cent of Top 3 operators subscribers, contribute 20 per cent plus of their revenues. While the ARPU for the segment had dropped 25 per cent it was lower than that witnessed in prepaid,” it added.

Also Read: Reliance Jio Launches AI Based Platform — JioInteract

” Incumbents will, in our view, have to respond to Jio’s plan and cut plan prices. Any 10 per cent cut in postpaid prices will lead to around 2 per cent cut in overall ARPU. Any 10 per cent cut in postpaid prices will lead to 12 per cent/6 per cent EBITDA (Earnings before interest, tax, depreciation and amortization) hits for Idea and Bharti respectively,” the report said.

The report further said postpaid churn is lower and it is believed that shift to Jio will be gradual. “Around 40 per cent of the postpaid customers are corporate, and these would be a key target, in our view.” (IANS)

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Microsoft Empowering Small Businesses in India with Jio: Satya Nadella

The Microsoft CEO said the company is re-imagining customers' data estates with the cloud era with new limitless capabilities

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FILE - Microsoft Corp. signage is shown outside the Microsoft Visitor Center in Redmond, Wash.
FILE - Microsoft Corp. signage is shown outside the Microsoft Visitor Center in Redmond, Wash. VOA

Microsoft is empowering small businesses in India in their Cloud journey with Reliance Jio, the company’s CEO Satya Nadella has said.

Reliance Industries (RIL) in August announced partnership of its subsidiary Reliance Jio Infocomm with Microsoft in the technology space, including creation on cloud solutions.

As per the partnership, Jio will leverage the Microsoft Azure cloud platform to develop innovative cloud solutions focused on the needs of Indian businesses.

“Organisations today need a distributed computing fabric to meet their real world operational sovereignty and regulatory needs,” Nadella said during the company’s earnings call after posting $33.1 billion in revenue with $10.7 billion in net income (an increase of 21 per cent) for its first quarter of fiscal year 2020.

“In India, we’re bringing the power of Microsoft Cloud to millions of small businesses through our partnership with Jio, one of the largest mobile carriers in the country,” Nadella added.

According to Mukesh Ambani, Chairman and Managing Director of Reliance Industries (RIL), by working together to develop innovative and affordable cloud-enabled digital solutions built around Jio’s world-class digital infrastructure and Microsoft”s Azure cloud platform, “we will accelerate the digitization of the Indian economy and make Indian businesses globally competitive”.

Jio will set up data centres in locations across India, consisting of next-generation compute, storage and networking capabilities, and Microsoft will deploy its Azure platform in these data centres to support Jio’s offerings.

Microsoft
Microsoft CEO Satya Nadella delivers the keynote address at Build, the company’s annual conference for software developers. VOA

The initial two data centres, which can house IT equipment consuming up to 7.5 MW of power, are being set up in the states of Gujarat and Maharashtra. These are targeted to be fully operational in 2020.

“Every Fortune 500 customer today is on a cloud migration journey, and we are making it faster and easier,” said Nadella.

Due to the solutions developed by Jio through the Microsoft Azure platform, Indian start-ups will have access to efficient and affordable cloud infrastructure and platform services, enabling them to develop innovative products and services faster and more cost-effectively.

Also Read: Tesla Logs Profitable Quarter, Musk Bullish on Energy

Small and medium businesses in India also will have access to a range of cloud-based productivity, collaboration and business applications including Office 365, enabling them to compete more effectively in the Indian marketplace, the company said.

The Microsoft CEO said the company is re-imagining customers’ data estates with the cloud era with new limitless capabilities.

“Azure AI now has more than 20,000 customers, and more than 85 per cent of the Fortune 100 companies are using Azure AI in the last 12 months,” he informed. (IANS)