Reliance Jio will roll out its Prime membership from next month and if it becomes a hit among consumers, it will have adverse impact on Airtel, Vodafone and Idea.Jio’s Rs 303 per month membership can affect 16-17% fall in telecom industry revenues in FY18, if it finds maximum traction.
Brokerage Kotak Institutional Equities told ET that it would be "foolhardy for incumbents to assume they can command material pricing premium in the marketplace versus Jio".
Kotak estimates "a potential ceteris paribus negative impact of around 16-17 per cent on industry revenue in FY2018" if Jio's Rs.303/month offer appeals to customers with total monthly wireless spends of Rs. 200 or more. But it noted that the estimated dip in industry revenue could be restricted to 8-10 per cent if there is "ARPU sanity in the sub-Rs.200 segment of the market".
On the flip side, brokerage Credit Suisse, however, feels market leader Bharti
"While it didn't make sense to match Jio's free offer, we believe Bharti has decided that it will not hesitate from matching Jio's paid offers," the Swiss brokerage said.
"Some of the largest corporate customers of incumbents have not seen rates go down or data allowance go up since Jio's launch, even as customers intending to port out and new users have seen a significant improvement in the price-value equation," analysts at Kotak said in a note seen by ET.