Reliance Jio Infocomm Ltd announced its entry into the postpaid business yesterday with Rs 199 plan that offers 25 GB data every month, which is as much as 50 percent cheaper than that offered by its competitors. The pack also focuses on international and roaming calls than domestic benefits which will benefit the frequent business travellers, who form the major category in the postpaid users.
Jefferies pointed out that only 7 percent of the Indian population use postpaid plans from the top three telecom operators, however, they make for 20 percent of their revenue share.
Following the news, competitor Idea Cellular slumped as much as 11.4 percent, trading at Rs 51.70 on NSE at 1:16 pm. Bharathi Airtel too dropped by over Rs 26 (6.42 percent) and was trading at Rs 385.65 at 1:14 pm.
In March 2018 quarter, Bharati Airtel had posted its lowest profit in 15 years. It reported a 77.8 percent decline in net profit to Rs. 82.9 crore for the January-March 2018 quarter.
Idea Cellular too reported a Rs 962 crore net loss for the same quarter.
Morgan Stanley in a note said that for every 10 percent of postpaid subscribers switching to Jio's new plan, Airtel could lose 1 percent of its revenue from wireless.