Analysts see market share gain for Jio post Bharat phone launch; lower probability of tariff hike in near-term

economictimes.indiatimes.com:

Jio Bharat phones at an «attractive pricing» will enable Jio to gain market share at the lower end segment and signals a reduced probability of tariff hike in the near term, brokerages tracking the sector said. Jio on Monday launched internet-enabled Jio Bharat phones at Rs 999, packing in a cheaper monthly plan of Rs 123 for unlimited voice calls and 14 GB data. The new offering aims to accelerate the '2G Mukt Bharat' vision, as India still has 250 million mobile subscribers trapped in the 2G era with feature phones.

In its note, JP Morgan said this «disruptive step» can halt incremental tariff increases for 2G and help Jio gain a share in that segment. «We believe with this phone Jio can take market share at the lower end of the market. This also puts Bharti at risk as it can see increased churn from its recent 2G price action of increasing the Rs 99 plan to Rs 155 plan,» it said.

Jio already had become aggressive at the premium end of subscribers in March 2023 through an aggressive postpaid plan launch, and the latest move showcases its aggressiveness towards the lower end of the subscriber spectrum as well, it noted. «We believe this is negative for Bharti as any hopes of a tariff hike should be diluted over the next 12-18 months,» JP Morgan added. Emkay, in its note, said that JioBharat is better placed to disrupt the market as compared to the original JioPhone in 2018, «as it is a more focused product, has a simpler value proposition and has better distribution and production planning».