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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.

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” 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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Jio Tops 4G Download Speed Chart

Jio tops 4G download, Vodafone upload speed in March

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Jio
Jio services now include attractive lifestyle products as well. (Wikimedia Commons)

With 22.2 Mbps (megabits per second) average download speed, Reliance Jio topped the 4G download speed chart of the Telecom Regulatory Authority of India (TRAI) for March. For Jio, its an improvement over 20.9 Mbps achieved in February.

Reliance Jio was the fastest 4G operator in 2018 with the highest average download speed all through the year.

Performance of Bharti Airtel dipped marginally in March to 9.3 Mbps from 9.4 Mbps in February, according to the data published by the telecom regulator.

Though Vodafone and Idea Cellular have merged and operate as Vodafone Idea, the TRAI published their network performance separately.

Reliance Jio. Source- www.reliancejio.website

Average 4G download speed on Vodafone network improved marginally to 7 Mbps in March from 6.8 Mbps in February. Idea registered a marginal decline in average download speed from 5.7 Mbps in February to 5.6 Mbps in March.

Vodafone topped the average 4G upload speed chart in March with 6 Mbps, which is same as February.

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Idea and Airtel network registered slight decline in average 4G upload speed at 5.5 Mbps and 3.6 Mbps, respectively, in March, while Jio witnessed improvement with 4.6 Mbps average upload speed.

The average speed is computed on the basis of data collected by the TRAI with the help of its MySpeed application on a real-time basis. (IANS)