Reliance Jio to decide telcos earnings for 'couple of years': CS

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Reliance Jio’s decision to announce a new tariff plan for its existing 10 crore subscribers, and those who sign up before March 31, will put a ceiling on the revenues of incumbent operators, a note by broking firm Credit Suisse said Wednesday.

At a press conference yesterday, Reliance Industries chief Mukesh Ambani said starting April 1, Jio will launch a Prime offer, under which users can opt for its ongoing free calls, free data (subject to 1GB per day) and get access to its media suite for a one-time fee of Rs 99 and a Rs 303 monthly plan.

For other subscribers who take up Jio’s services after April 1, Ambani said the telecom company’s tariff plans will offer 20 percent more data than any competitor.

In a note to clients, Credit Suisse said it would continue to stay “cautious” on the stock price outlook for most listed telecom companies as Jio’s aggressive pricing plans will pressure their revenues, especially from high-value customers.

“Nearly 50 percent of revenues for incumbent operators like Bharti come from subscribers with Rs 300+ average revenue per user. The Rs 303 plan will put an ARPU ceiling on all such subscribers,” analysts at the firm wrote.

The report added that while recent news over mergers and acquisitions in the telecom space – again thanks to Jio – had helped shares, “we see no let down in Jio's competitive aggression, which is likely to determine earnings for next couple of years.”

According to Jefferies, the Rs 303 plan was the most “disruptive” announcement by Jio.

Given the way Jio's plans are structured and how incumbents have responded over the past quarter, “focus should be solely on ARPU which would also come under pressure,” said the Jefferies note to clients.

But Jefferies also cautioned that the challenge for R Jio will be to maintain quality of services as there issues relating to point of interconnect and data speeds, which according to TRAI have been lower than Airtel. These would put to test Jio’s ability to retain customers once they start charging for services, it said.

Ambani yesterday announced that Jio, which launched services on September 5 last year, had continued to add subscribers at a healthy rate, crossing 10 crore subscribers in less than 6 months of launch.

Market leader Bharti Airtel has 26.5 crore subscribers. Idea, which is in merger talks with Vodafone, has 18.5 crore.

The RIL chief added that Jio carried 1 billion GB of data on its network last month -- 5.8 times and 10 times that of Airtel and Idea respectively, according to Jefferies – while 55 million hours of videos being used daily.

Ambani also said the company will increase its coverage ratio of 99 percent of the country’s population by 2017 end.