Reliance Jio to inflict more pain to Bharti Airtel, Vodafone India and Idea Cellular
KOLKATA: Bharti AirtelNSE -0.99 %, Vodafone India and Idea CellularNSE -2.16 % will endure more financial pain through FY19 with Reliance Jio Infocomm unlikely to slacken its pricing aggression in its bid to maximise customer acquisitions and close the gap with its rivals, analysts said.
The price wars, they said, would continue as Jio is focussed on retaining and increasing its almost 187 million-strong subscriber base.
“The price war will continue as (parent) Reliance Industries (RIL) is very firm about the strategy going forward on (telecom arm) Jio, which continues to be focused on customer acquisition and is open to further tariff cuts based on actions of incumbents,” BNP Paribas said in a note to clients seen by ET.
Analysts at JP Morgan backed the view, saying, “Jio clearly wants to offer the most competitive tariffs and gain a higher subscriber share, and its core business cash flows are strong enough to support this strategy, especially as core project spending drops.”
Jio’s future pricing strategy, according to the brokerage, could induce its financially stressed rivals to increase tariffs even though this could “effectively lead to a loss of market share.”