- Airtel and Vi stocks sharply climb as Jio Phone Next fails to maintain buzz in the market.
- Airtel and Vi close 4 and 6.4 percent higher after Jio Phone Next gets a lukewarm response.
- Jio Phone Next’s higher-than-expected pricing and financing options fail to make it a market disruption.
Vi and Airtel stocks saw a steep jump after what analysts suggest to be a missed opportunity for Jio. The Jio Phone Next that was launched recently has underperformed when it comes to price and financing options. The phone has seemingly failed to live up to the pre-launch hype, which has benefited rivals Airtel and Vi as their stock rose 5 percent and 7 percent, respectively. The intraday trades closed with Airtel at 4 percent higher at Rs 712.3 and Vi closed at 6.4 percent higher at Rs 10.16 when compared to Jio. This comes after the Jio Phone Next did not manage to disrupt the market as intended.
Airtel and Vi stock climbs amidst underperforming results of Jio Phone Next
The Jio Phone Next was recently launched at a price of Rs 6,499, which makes it a tough buy amongst other competitors as well as a difficult upgrade for people who are still stuck in feature phones or earlier Jio Phone models. In fact, there are other smartphones that are available that are cheaper than the Jio Phone Next. Over and above the sticker price the smartphone’s financing schemes also stand to be unfavourable. These issues combine to make the JioPhone Next a non-disruptive product much different from expectations. Previous track records also show that this initial pricing could see a change given the lukewarm response. Jeffries Group, an American multinational independent investment bank, and financial services company, has commented on similar lines.
“Even on an absolute spend basis, 2G feature phone users, low-end JioPhone users, and high-end JioPhone users will have to spend 2.8x-4.5x more over a 24-month period to upgrade to JioPhone Next,” Jefferies said in a note. According to Credit Suisse, Vi and Airtel are also expected to tie up with smartphone OEMs and banks and financing companies to offer to help reduce upfront costs of smartphones. This comes in a quest to transition Airtel and Vi’s existing 2G network users to 4G networks which still account for about 20-25 percent of its user base.