Telecom experts think Jio could still beat Voda-Idea in short term

Telecom experts have opined that even though the result of the merger of Idea Cellular and Vodafone India could result in their networks running deep, they would still be beaten by Reliance Jio when it comes to prices offered.

Ever since Reliance has launched Jio services, there has been a substantial shift in the preferences of users. Jio offers unlimited voice calls and data to its customers, free as of now, and would be charging a minimal amount once the free service ends.

What the new entity does to battle this shift remains to be seen.

Also read: Voda-Idea merger expected to benefit telecom industry, say experts

While both brands can concentrate on their strongholds, unhappy subscribers can always select either of the two firms instead of opting for a switch to a third network provider.

"In the telecom sector with connectivity issues, price points are on the same scale, the brand becomes the differentiator. There is connectivity with the image that comes from long usage and this is best undisturbed," brand consultant Harish Bijoor told ET.

Experts also said that maintaining two different identities would be a less expensive option than creating a new one, for which they would also need to make a new connect with consumers.

However, some analysts said operational synergies of maintaining two brands will be limited. As per brokerage firm Credit Suisse, it would be interesting to see both brands being retained because the combined entity could find it hard to realise the full extent of its synergies; more so, since competing brands from the same company simultaneously exist in the market.

(Image source: Free Press Journal)