JioPhone’s three-year lock-in cycle is coming to an end for registered JioPhone users. According to experts, the latest deal is targeted at maintaining Jio’s 2G subscribers. They do not believe this would have a major impact on rivals Bharti Airtel Ltd and Vodafone Idea Ltd.
Reliance Jio has revealed the Jio Phone 2021 deal, which includes a new phone as well as three new plans. A two-year plan, a one-year plan, and a special plan for current users are all available. For Rs1,999, you will get two years of free calling and 2GB of data per month. Those who choose the one-year plan will pay Rs 1,499, while current JioPhone users will pay Rs 749 for the same duration.
Investors should be aware that Jio’s current JioPhone users’ three-year lock-in period is coming to an end. According to experts, the latest deal is targeted at maintaining Jio’s 2G subscribers. They do not believe this would have a major impact on rivals Bharti Airtel Ltd and Vodafone Idea Ltd. (Vi).
“We don’t expect this deal to have a big impact on Bharti/2G VIL’s customers. This is primarily due to the target segment’s low income strata’s unwillingness to pay the $1,999 upfront fee, as well as a shortage of smartphone options acting as an obstacle, according to analysts at domestic brokerage house Dolat Capital Market Pvt Ltd.
Credit Suisse, a foreign brokerage firm, believes the latest bid is unlikely to have a significant effect on peers. Vodafone Idea, if at all, could be more vulnerable to subscriber churn.
Analysts, however, warn that the Indian telecom sector faces some challenges. From a short-term perspective, “competition + spectrum auctions + possible fundraise by VIL (deadline of 28 February for talks with a consortium of lenders) does not augur well for the sector or any of the companies (Bharti, Indus, VIL, or even Jio”),” according to a Dolat Capital report dated February 27.
Meanwhile, Bharat Airtel’s stock price target has been lowered to Rs600 by research firm Jefferies India Pvt Ltd. “A tariff cut by Jio is a negative surprise, as we expected delays in tariff increases due to difference in Jio and Bharti’s subscriber additions and downgraded Bharti Airtel in Jan-21. We see limited positive triggers with MSCI rebalancing behind us,” said a Jefferies study dated February 28.
Bharti Airtel and Vodafone Idea both traded in the red on Monday, losing about 1.5 percent each.