Shares of two large telecom players — Bharti Airtel Ltd and Vodafone Idea Ltd — were battered after Reliance Jio launched its new tariff plans for its postpaid customers. However, the stock of Reliance Industries (RIL) witnessed a rise mainly due to the investments RIL’s retail arm attracted.
In the case of RIL’s new postpaid plan, priced at Rs 399, it is 20 per cent cheaper than that of Airtel. However, it is the same as Vodafone Idea (VI).
Compared to Airtel and Vodafone Idea, Jio offers better data and subscriptions to various renowned OTTs. Time will tell the impact if it will have an impact on Vodafone Idea and Airtel, reports Live Mint.
According to a report by Fitch Ratings, Vodafone Idea will gradually lose market share given its weak balance sheet and limited financial flexibility. “We expect industry tariffs to rise as users adopt higher-price 4G plans.”
The report added, “We expect Jio and Bharti to increase their combined revenue market share to 75-80 per cent from around 70 per cent in the next 12-18 months, at the expense of Vodafone Idea, which will likely lose 50 million-70 million subscribers in the next 12 months; it lost about 155 million subscribers in the last nine quarters.”
Jio reported EBITDA growth of 55 per cent, while Bharti reported Indian mobile EBITDA growth of 35 per cent in the first quarter of the year ending March 2021 (FY21). In the case of Vodafone-Idea's quarterly EBITDA, it has been stagnant at USD 200 million-230 million, which covers only half of its interest cost.
