Reliance Jio offer may cap telecom realisations

The impact on telcos is not likely to be as much as initially expected

The launch announcement of a fourth-generation technology (4G) feature phone by Reliance Jio on Friday led to a sharp fall in telecom, cable and direct-to-home entities’ shares. 

The market was reacting to worry that the new phone and Jio Phone TV offer would lead to further downward pressure on these companies’ realisations. While the new phone and the plans are targeted at the mass market, and could see some response from users wishing to migrate to the multimedia experience, the impact on telecom companies is not likely to be as much as initially expected.

This is because the Street was expecting a