Attractive deals for consumers in India’s 4G data telecom space are expected to continue, ahead of the commercial launch of Reliance Jio, ranging from better handsets at lower prices and more data limits at existing tariff, according to analysts and top brokerages.
But companies will prefer to incentivise their customers not by lowering tariff, but by offering higher data downloads for the same price, in a bid to protect their average revenue per user, the research papers add.
This apart, the analysts feel, the launch of Reliance Jio cannot be far away, with some even predicting it to be August 15 to coincide with India’s Independence Day, with also with companies like Bharti Airtel, Idea and Vodafone having already made their moves to counter the challenge.
Here are some excerpts from what the brokerages have said on current state of play in India’s 4G data telecom market:
Bank of America Merrill Lynch: India could see a capacity war and not a price war. In our view, Jio could focus on offering more data at the same price rather than lowering average revenues per user, as such a move would impact their ability to garner a return from its business.
We expect incumbents to match Jio’s tariff by also offering more data at the same price.
UBS: We agree that the Reliance Jio launch has the potential to further disrupt mobile data tariffs, we think there is a high likelihood that the entry of Reliance Jio will also expand the size of the market significantly.
We believe that India’s mobile data market is likely to grow 8 times (to Rs 2,133 billion) by FY26, driving strong operating leverage.
Citi Research: With Reliance Jio’s commercial launch imminent, increase in data allowance to pre-empt the likely aggression by Jio wasn’t unexpected. Data network utilization for telcos is currently low and therefore we believe that telcos should be able to handle any spurt in usage.