“Analysts believe that the popular Jio recharges will see a hike of 25-30 percent”
Jio is all set to increase tariff plans prices by up to 40 percent from December 6th pan-India. While the company is yet to reveal the new hiked recharge plans, analysts believe they’ll be 20 percent cheaper than other incumbents. An IANS report has revealed that only select Jio plans will have a 40 percent increase, while popular ones could increase by 25-30 percent. This will make some of the Jio packs 15-20 percent cheaper than the new Airtel and Vodafone Idea recharge plans, added the report. To recall, Both Airtel and Vodafone Idea have increased their tariffs by up to 41 percent.
“Similar to incumbents, we think only select Jio packs will have a 40 percent increase but popular ones could have 25-30 percent. We think the incremental 300 percent benefit which Jio is talking about is by offering more data allowances. In our view that incrementally doesn’t entice users much beyond 1.5 GB,” Bank of America Merril Lynch said in a note.
It further added that “if Jio data allowances are not within ‘fair usage policy’ control, then we see upside risks to our capex investments.” Jio, meanwhile, has announced that it’ll be introducing new All-in-One plans that’ll be 40 percent more expensive than existing plans, but will offer 300 percent more benefits.
The report has also said that the price hike of Airtel and Vodafone Idea is better than expected. While the entry-level and premium tariffs were hiked by up to 41 percent by both the telcos, the popular plans saw hikes of only 25-30 percent. Credit Suisse has said that after Jio details its tariff plans, Airtel and Vodafone Idea may reduce the prices of some of its new plans by 10-20 percent.
“Jio has indicated hikes of a similar magnitude albeit with higher benefits; details awaited. We like the way the new pricing construct is designed – it encourages up-trading and discourages down-trading; this should help recreate parity in the industry. We await details from Jio to revise our models,” Kotak said.