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Reliance Jio Summer Surprise: Airtel, Vodafone, Idea May Launch Counter Offers, Analysts Say

Reliance Jio Summer Surprise: Airtel, Vodafone, Idea May Launch Counter-Offers, Analysts Say

By Press Trust of India | Updated: 4 April 2017 12:41 IST

The new Reliance Jio Summer Surprise offer is likely to elicit an aggressive response from incumbent telecom operators such as Bharti Airtel, Idea and Vodafone. Analysts expect the telcos to launch counter-offers in order to keep their customers away from Reliance Jio and its Jio Summer Surprise offer, resulting in further competition in the already intensely competitive sector.

"We believe incumbents would make comparable offers to their high-value subscribers even at the cost of short-term revenue loss. The three incumbents (Bharti Airtel, Idea and Vodafone) have sufficient 4G spectrum to compete against Jio," Deutsche Bank Markets Research said in its latest report.

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The incumbent operators are likely to remain tactical in response, it added. The three operators declined to comment.

Reliance Jio Prime and Jio Summer Surprise offer

Billionaire Mukesh Ambani's Reliance Jio, on March 31, announced it had notched an unprecedented 72 million paid subscribers, and extended by a fortnight its deadline for migrating other subscribers to its paid offer. It has further sweetened the deal by announcing a 'complimentary offer' for three months to those who pay Rs. 303 prior to April 15, thus offering data at rock-bottom prices.

Put simply, subscribers recharging prior to the said date using Jio's Rs. 303 plan (or any higher value plan) will get services for the initial three months on a 'complimentary basis', and paid tariff plan will kick-in only in July.

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In its report, Citi Research said that it expects the competitive intensity in telecom sector to remain high.

"The high conversion rate of Jio's subscribers opting for the [Jio] Prime offer is likely to force incumbents to react in order to reduce churn, especially at the mid-to high-end. Our checks had shown that while incumbents had introduced plans to counter Jio, these were not being marketed aggressively. This could now change," Citi has said.

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