Jio’s new bundled offers may not hit Airtel: Analysts

Reliance Jio’s new bundled offers on its 4G feature phone – JioPhone – will scarcely have any impact on Bharti as the telco is likely to continue gaining bulk of the users leaving (Vi) and offset any user losses to Jio, said analysts.

This, they said, is since Jio, unlike Airtel, runs a pure 4G network and Vi’s 2G users wanting to switch to Jio would need to buy a new 4G device, whereas migration to Airtel won’t require any such extra investment as the latter offers both 2G and 4G services. This would come in the backdrop of an excepted acceleration in Vi’s 2G user losses as its network remains weaker than its two rivals, given that the cash-strapped telco has been unable to spend adequately on ramping up its 4G play.

Analysts added that the new JioPhone offers won’t change the sector’s competitive dynamics as the minimum upfront commitment of Rs 1,499 (including device) is more than double what a 2G user, typically, spends upfront on a device and the initial recharge.

“We foresee limited impact of the new JioPhone plans on Bharti as we expect the company to offset any negative impact through market share wins from Vi,” Goldman Sachs said in a note. It added that “Bharti remains better placed vs Jio,” in gaining incremental market share on the 2G users front from Vi.

Jio’s twin JioPhone-2021 offerings announced on Friday are aimed to arrest the sharp slide in Jio’s 4G user adds in recent quarters, especially as rival, Airtel has been adding far higher numbers of mobile broadband users in recent quarters. The new offers are also targeted at grabbing the country’s remaining 300 million-odd feature phone users, who are largely with Vi and Airtel.

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Analysts said Jio’s new feature phone offers indicate that supply-chain issues around JioPhone have been resolved, and the handset’s wider availability could potentially lead to higher subscriber adds in the near-term for the telco.



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