According to analysts at JP Morgan, Reliance Jio’s launch of cheaper postpaid plans with unlimited 5G may delay recovery in the key profit metrics of Bharti Airtel in the Indian market. In a client note, the analysts said that unlimited 5G data consumption would also delay any kind of 5G monetisation, pressure the expansion of average revenue per user (ARPU) and delay 4G prepaid tariff increases.
Jio recently launched its new postpaid plans starting from Rs 399 rupees that included over-the-top (OTT) packages, forcing Airtel to roll out similar plans. Airtel’s new family plans can drive ARPU drops of Rs 100-200 per subscriber and any subsequent price matching to that of Jio can drive further ARPU drops of Rs 50-100 per subscriber.
Further, they added that stiff competition to attract 5G subscribers would reduce the pricing power for the operators and they will not be able to monetise 5G by charging a premium. They kept their “underweight” rating on Airtel, saying that ARPU expansion for the telco was at risk and could even reduce over 2024-25 as 5G price wars take place.