-
ALSO READ
Bharti Airtel, VIL shares plunge after Jio unleashes postpaid tariff war
Jio's postpaid plans timed well, may wrest away VIL subscribers: Analysts
Jio postpaid plans: BofA, CLSA think its not a threat to Airtel; here's why
Reliance Jio's 2G-free India drive likely to hit Vodafone Idea hard
Jio adds 6.25 mn users, Vodafone Idea loses 3.5 mn in February: Trai
-
India’s telecom price war is back, and this time the battle is being fought with freebies.
After announcing the first tariff increase in three years in 2019, telecom carriers are offering incentives such as subscriptions to services from Netflix to Amazon Prime to win customers in a content-hungry market.
With theaters in India, among the biggest film markets globally by number of tickets sold, closed due to pandemic restrictions, the demand for entertainment content has shifted online. Several big-budget local films have been released on streaming platforms this year.
On Tuesday, Reliance Jio Infocomm Ltd., the country’s biggest telecom company by subscribers, launched a new 399-rupee ($5.4) plan for users who opt for monthly billing instead of pay-as-you-go packs. Besides 75 gigabytes of data, customers would get access to Netflix on a mobile device and one-year subscription to two over-the-top applications and access to Jio’s movie and songs library.
“Reliance Jio’s new postpaid plans offer more content and come at 20% discount” to Bharti Airtel Ltd., analysts at Jefferies India Pvt. said in a report to clients. Bharti’s comparable entry-level plan is priced at 499 rupees and offers the same amount of data but doesn’t include access to Disney+ Hotstar and Netflix, while Vodafone Idea Ltd.’s plan offers 40GB data and doesn’t include any of the three online platforms, according to analysts.
ALSO READ: Jio postpaid plans: BofA, CLSA think its not a threat to Airtel; here's why
Over the past four years, the number of users opting for monthly billing of mobile services has come down sharply and such users now form about 5% of the total 1.14 billion subscribers and generate 15% of the sector’s revenue, according to Jefferies analysts.
Although Jio introduced its postpaid plans in 2018, the company’s offerings didn’t see much traction, showcasing ‘stickiness’ of this base of customers, according to Morgan Stanley analysts.
“This time extremely aggressive content offerings could be the key attraction for consumers,” Emkay Global Financial Services Ltd. analysts Naval Seth and Sonali Shah said in a note. They expect Bharti and Vodafone Idea to follow Jio with similar tie-ups with OTT platforms to retain the monthly bill paying customers whose average monthly spending is higher than the prepaid users.
Bharti Airtel has lost nearly 9%, while Vodafone Idea has fallen 12.7% in two sessions since Jio announced the enhanced postpaid plans.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU