The newly rolled out JioPhone of Reliance Jio, which targeted at more than 50 Crore feature phone consumers, will cause a stiff confront to present players. This will lead the existing players to safeguard their user market share. This data was provided by Jefferies, the investment banking firm to the media in an interview.
“The monthly scheme evaluates positively against the merged Average Revenue Per Unit (ARPU) of leading 3 current players, but it does offer a cap. Although the costing is not as troublemaking as feared, it will yet be a stiff confront to current players to safeguard their user market share,” Jefferies claimed in an interview in a report.
Jio rolled out its much-expected 4G feature handset, which will be made obtainable from this September. The handset has a price tag of Rs 1,500, which is taken as a completely refundable amount and given at the end of 3 Years.
The firm is planning shipments of 5 Million handsets per week. The monthly scheme for Rs 153 will provide limitless SMS/voice and 0.5 GB of Internet data each day. There are 2 sachet offers for Rs 54 and Rs 24 with validity of 7 and 2 Days, respectively.
The phone can be linked to television via a JioPhone cable. On the other hand, this will need subscription to the plan of Rs 309 each month (1 GB each day grant), which will enable 3–4 Hours of video streaming every day.
“We think that the costing on both plan as well as device is not as awful as feared for current players. While refundable, the price of obtaining the handset is not game altering than the cost of current feature handsets. The plan of Rs 153 each month too evaluates favorably in comparison with the Rs 142–158 ARPU across leading 3 current players but does make a cap,” the report further added.
The report claimed that in the context of a superior addressable market for Reliance Jio, spirited dynamics for current players will be 2 times the ARPU erosion/splicing in subscriber churn and superior ARPU subscription.