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Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

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Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by prernajain on Tue Sep 13, 2016 11:44 am

What type of competition do you perceive is going on between the telecom companies. In which market structure would you place telecom companies and Why?

Which pricing strategy has Reliance Jio adopted. Is it commercially viable?

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by sbagla21 on Wed Sep 14, 2016 10:42 pm

Yes according to me JIO aggressive pricing will impact operators profitability and sustainability as with the launch of super cheap yet super fast internet people will get more attracted to JIO as today everything works with internet. though the other operators have lost millions of rupees because of it and yes this would definitely change the paradigms of telecom sector as to compete with JIO, other will surely lowering their rates to as minimum as possible. i would place the telecom companies like airtel, idea, etc in monopolistic competition as it is a type of imperfect competition as many companies are providing services yet the prices charged by its rivals is taken as given and impact of own price on others is ignored.


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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by rohit.bharwani on Thu Sep 15, 2016 9:59 pm

YES it will have great impact on others operators like bharti airtel, vodafone &many others operators.As we all know reliance jio has come up with such a wonderful features like free call rates,free messages and they are charging Rs50/GB data as compared to others operators are charging very high rates. jio has entered in such a way that everyone is astonished it has a huge impact on companies profitability and sustanibility of others operators(airtel,vodafone,idea) as well as it will change the paradigms for the telecom sector.talking about the competiton in this case monopolistic competiton arises because there are few sellers in the market and consumers has choice what to buy the only difference is that only price level changes of different operators.
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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Megha Dhyani on Sat Sep 17, 2016 12:17 pm

Yes, In my opinion Reliance Jio's aggressive pricing impact incumbent operators (like Bharti Airtel, Vodafone and Idea) profitability and sustainability.Because reliance jio is giving affordable & simple tariff like No voice call charges(both STD & Local),No roaming charges,No high data charges,No blackout days. Jio also has announced free voice calls across network and data charges that are 30-50% lower than that charged by incumbents including Vodafone and Airtel. These disruptive changes would create pressure on incumbents on multiple fronts.

I would place telecom companies like Bharti Airtel,IDEA, Vodafone in Monopolistic Competition as:
No. of firms=Many
Elasticity of demand=Highly Elastic
Product Differentiation=High

Pricing strategy used by Reliance Jio’s strategy is "PENETRATION PRICING" (In penetration pricing lowest price for the new product is charged. This helps in prompt sales and keeping the competitors away from the market.)

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by kaushalsoni139 on Sat Sep 17, 2016 11:53 pm

yes,it will impact the market players. in fact we are seeing it everyday that how JIO is affecting the market share and profitability of other telecom companies...
of course it will change the old paradigm of the sector as we can see that how it is increasing its market share by getting its services for free.this pricing strategy is called as penetration pricing in which firm enters the market at very minimal price for its product so that it can have an edge over its competitor by expanding its market share at high rate..
thus i will place this in oligopoly market structure because of the following reasons:-
a).there are few sellers;
b).there are large number of buyers;
c).products can be differentiated.
and also the competition betwwen the telecom co. is very stiff as now each is trying to regain its market share (diminished because of jio)by launching new product or going into collaboration.
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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Krishna Dhoot on Sun Sep 18, 2016 12:59 pm

Reliance Jio's pricing is definitely attacking on competitors price. As we can see that Airtel, Vodafone and Idea have cut tariff and bundled free calls with data. The market share has already goes down after launching of Jio. Incumbents have been trying various strategies to retain top end users.
Reliance is using penetration pricing, in which lower price of new goods are charged.
We can see that Reliance is trying to be acquired monopoly market for attracting all buyers with single seller.
It would affect the profitability and sustainability of other telecom sector in short run but we cannot predict any situation in long run as it can be positive or negative.
RJio has disrupted industry pricing more than we imagined Bharti Airtel to Rs 290 from Rs 335, and that on Idea Cellular to Rs 85 from Rs 100.
Airtel may cut data prices by 25% in 2016 as a result of Reliance Jio launching services, a report said.It expects the weaker revenue growth for No.1 Bharti Airtel and third ranked Idea to lead to 7 per cent and 10 per cent cuts in earnings before interest, tax and 10 per cent and 65 percent cut in earnings per share, respectively.
I think the telecom sector will come under the Monopolistic competition because there are many number of firms i.e. large number of sellers and product differentiation is high.And they used market penetration as their pricing strategy with the aim to attract large number of customers by lowering their prices.




Last edited by Krishna Dhoot on Fri Sep 23, 2016 7:59 am; edited 1 time in total

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Megha Nagelia on Sun Sep 18, 2016 10:47 pm

Reliance Jio has completely shaken up the Market even before its launching in the Market.It forced other Telecom Companies to shift their prices, Data packs, Tariffs etc.Reliance Jio has come up with the idea which is very much affordable, they are also providing their handsets at affordable prices.People are really giving positive responses and they are widely using Jio services.This kind of idea is very much popular in Developed Countries instead of Developing Countries. In Developed Countries data tariffs stand at 0.4-0.5% but in developing country, it is up to 2.6-3% which is not be acceptable for the Country. So this may be idea behind the announcement of Reliance Jio which has come up with this idea.In Telecom Sector before Jio entered the market, the data capacity was for 3G, but Jio came with the drastic change in human's life with the operation of 4G in India.By the successful results for 4G, Companies are trying to bring 5G in the market so they can compete with their competitors.
Reliance Jio has adopted Penetration Pricing which says in the initial stages Price will be low to attract new customers and to make them aware of the product prevailing in the market but later on prices get increased.For example: Recently they are providing free calls service for 3 months upto 1st of January, by this scheme people are very much concerned that for at least they can talk free anywhere irrespective of time limit definitely, when huge population will start using it they will increase the prices.
In my Opinion Reliance is playing a Monopoly market Structure where Jio is only one to provide services at such a low price,so Jio is single seller, Many buyers and most importantly Price Maker for the Product.


Last edited by Megha Nagelia on Sat Sep 24, 2016 11:31 pm; edited 1 time in total

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by AYUSHI MISHRA on Tue Sep 20, 2016 2:02 am

"The telecoms sector is currently reeling under financial stress, high debt burden and slowdown in revenue growth. Further decline in data tariffs may impact operators' profitability and sustainability,"

The spectre of price war is back in the telecom space, with industry insiders and analysts predicting Bharti AirtelBSE 0.17 %, Vodafone and Idea CellularBSE -0.18 % to slash their rates to respond to the enticing tariffs that Reliance Jio Infocomm is offering.

At a time when the Indian telecom sector is in stress, with the upcoming spectrum auction expected to add to the burden, the startling Reliance Jio announcement of zero tariff for domestic voice calls in perpetuity, with sharply lower data rates, has aroused questions about the revenue model and profitability of the new player.

"Customers should pay for only one service, either voice or data. Not both. The world over operators charge for only data while voice and messaging are essentially free. Very Happy
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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by shubhrv on Tue Sep 20, 2016 2:36 pm

According to me, yes Reliance JIO aggressive pricing will impact operators(vodafone , airtel etc) profitability and sustainability as with the launch of super cheap yet super fast internet people will get more attracted to JIO as today everything works with internet.
It is also providing simple tariff like No voice call charges(both STD & Local),No roaming charges,No high data charges,No blackout days. Reliance is using penetration pricing, in which lower price of new goods are charged.
We can see that Reliance is trying to be acquired monopoly market for attracting all buyers with single seller.
In my Opinion Reliance is playing a Monopoly market Structure where every consumer wants to get Jio in Black Market also.

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Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector.

Post by Siddharth Jain on Tue Sep 20, 2016 2:56 pm

YES it will have great impact on others operators like bharti airtel, vodafone &many others operators.,While Jio’s plans are competitive, in the near term, we see their acceptance constrained by limited availability of 4G handsets and steep premium to current 3G subscriber.
jio has entered in such a way that everyone is astonished it has a huge impact on companies profitability and sustanibility of others operators(airtel,vodafone,idea) as well as it will change the paradigms for the telecom sectors.
Reliance Jio's pricing is definitely attacking on competitors price.
Reliance is using penetration pricing, in which lower price of new goods are charged.We can see that Reliance is trying to be acquired monopoly market for attracting all buyers with single seller.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Ankur Parwal on Tue Sep 20, 2016 3:59 pm

"The telecoms sector is currently reeling under financial stress, high debt burden and slowdown in revenue growth. Further decline in data tariffs may impact operators' profitability and sustainability,"

The spectre of price war is back in the telecom space, with industry insiders and analysts predicting Bharti AirtelBSE 0.17 %, Vodafone and Idea CellularBSE -0.18 % to slash their rates to respond to the enticing tariffs that Reliance Jio Infocomm is offering.

At a time when the Indian telecom sector is in stress, with the upcoming spectrum auction expected to add to the burden, the startling Reliance Jio announcement of zero tariff for domestic voice calls in perpetuity, with sharply lower data rates, has aroused questions about the revenue model and profitability of the new player.

"Customers should pay for only one service, either voice or data. Not both. The world over operators charge for only data while voice and messaging are essentially free

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Mubarak on Tue Sep 20, 2016 4:05 pm

Airtel, Idea and Vodafone have all increased data quotas on prepaid internet packs. “Our back-of-the-envelope calculations suggest mega saver packs are 35-40 per cent further cheaper than the traditional plans. We expect strong data traffic to compensate for declining data realisations,” it said.
The entry of RJio, it said, will further accelerate data adoption with affordable 4G handsets and data tariffs. JP Morgan said: “As RJio commercial launch nears, we are seeing tariff cuts from the incumbents with free calling being bundled together with data for some select high value plans, while there are also data tariff cuts.”


Last edited by Mak on Tue Sep 20, 2016 8:06 pm; edited 1 time in total

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by PGFA1658 on Tue Sep 20, 2016 4:10 pm

Reliance Jio Infocomm kicks off its much awaited but delayed 4G services on Monday, shaking up the industry with free voice and dirt cheap data, which top rivals Bharti Airtel, Vodafone and Idea will be forced to react to, draining their finances.
Mukesh Ambani-owned Jio's management is counting on its introductory offer of free calls and data to grab a 100 million customers rapidly.
Prashant Singhal, global telecom leader at EY, expects Jio's aggressive pricing to impact incumbent operators' profitability and sustainability while Hemant Joshi, partner at Deloitte, said it would change the paradigms for the telecom sector. Rajan Mathews, director general of GSM industry body Cellular Operators Association of India, however, put on a brave face, saying with Jio's offer the battle lines are drawn, and incumbents Bharti Airtel, Vodafone India and Idea Cellular will doubtless match the rates to retain their mid-to high-end customers.

Jio has filed its tariff plans with Telecom Regulatory Authority of India (Trai), promising free voice calls and mobile Internet at a fifth of current market rates along with a wide range of entertainment options once the free offer closes. Rajan Mathews, director general of GSM industry body Cellular Operators Association of India, however, put on a brave face, saying with Jio's offer the battle lines are drawn, and incumbents Bharti Airtel, Vodafone India and Idea Cellular will doubtless match the rates to retain their mid-to high-end customers.

Jio has filed its tariff plans with Telecom Regulatory Authority of India (Trai), promising free voice calls and mobile Internet at a fifth of current market rates along with a wide range of entertainment options once the free offer closes.

Announcing Jio's 4G launch earlier this week, Ambani had said customers must pay for only one service, either voice or data, underscoring a principle that threatens one of the main revenue streams for incumbents-they charge for both.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Ravi Sharma on Tue Sep 20, 2016 4:33 pm

Yes, As Reliance Jio’s commercial launch nears, incumbent telecom operators Airtel, Vodafone and Idea have cut tariff and bundled free calls with data to drive mass market adoption, brokerages said. The industry has been trying various data pricing strategies, with Bharti Airtel, Vodafone and Idea trying innovative price structures. Market leader Bharti Airtel yesterday announced two plans with data tariffs effectively lower by an eye-catching ’80 per cent’.But the Rs 51 per GB data versus industry norm of Rs 250-plus comes with the caveat of an upfront payment of Rs 1,498 for a year. This essentially translates into 30 per cent saving for someone using 1 GB per month data and 37 per cent for 2GB a month users. “In the past, ‘high upfront charge, low recurring recharge’ kind of plans have rarely found mass market appeal, more so when the benefit is spread out over a year. So we conclude that the addressable market for tariff cut plan appears quite small,” Credit Suisse said.
UBS said Airtel, Idea and Vodafone have all increased data quotas on prepaid internet packs. “Our back-of-the-envelope calculations suggest mega saver packs are 35-40 per cent further cheaper than the traditional plans. We expect strong data traffic to compensate for declining data realisations,” it said.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Garvit Kumar Shah on Tue Sep 20, 2016 4:56 pm

Yes ,Reliance Jio will have a very great impact on the other telecom sectors(Bharti, Airtel, Vodafone and Idea) on the basis of pricing because reliance jio will offer many services with very less or no rates. Like it is offering free voice call till 31st december 2016. And it will offer 4g data at a very less rate which will be 50rs per gb and if one consumer consumes more data then he will be charged only 25rs per gb. Reliance Jio has filled its tariff plans with Telecom Regulatory Authority of India.

Mukesh Ambani has said that he want to see jio in more than 100 million users within march 2017. He has informed all the employees in his empire to use reliance jio. Due to this many of the users of Airtel, Bharti, Idea and Vodafone has switch over to reliance because of its attractive offers like No voice call charges(both STD & Local),No roaming charges,No high data charges,No blackout days.

Due to reliance jio the shares of other telecom service provider has lower down and if reliance merge with the Aircel then its total revenue will become 26000 crore in which 15000 crore will be of reliance and 11000 crore will be of Aircel. This merge will have a very great impact on the other telecom service provider in which Airtel will occur a great loss.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by priyanka sharma on Tue Sep 20, 2016 5:33 pm

yes, Reliance Jio's pricing has impacted incumbent operators. Incumbent telecom players Bharti Airtel and Idea Cellular suffered huge cuts in their price targets as analysts feared Jio's launch would disrupt the $28-billion Indian telecom market.
Influential foreign brokerages Goldman Sachs, Credit Suisse and JP Morgan have cut their 12-month price targets for Airtel and Idea by as much as 19%.Shares of London-listed Vodafone Plc, which derives over a tenth of its revenues from the Indian market, too fell 3% on Thursday to its lowest level in more than a month.Shares of Airtel and Idea recouped some of the losses on Friday, gaining 2.7% and 0.4% respectively. Nevertheless, Airtel and Idea are still down 4% and 10% respectively and have lost market capitalisation of Rs 3,403 crore and Rs 5,157 crore since Reliance Industries (RIL) raised the curtains on its much-awaited telecom foray on Thursday.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Ritu kanojia on Tue Sep 20, 2016 6:27 pm

According to me yes, reliance Jio has made a great impact on the other telecom sectors like Bharti, Airtel, Vodafone & idea by launching affordable data services and free voice calls along with low cost handset pricing will drive greater data adoption across segments and will result in a major collection for data traffic in the country which may impact incumbent operators, probitability & sustainability.
my opinion is that reliance jio is molopoly market which attracts large number of buyers with single sellers

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by mayank khatri on Tue Sep 20, 2016 6:45 pm

As we all know, Reliance jio commercially launched, incumbent telecom operators Airtel Vodafone and Idea have cut tariff and bundled free calls with data to drive mass market adoption.

The industry has been trying various data pricing strategies, with Bharti Airtel, Vodafone and Idea trying innovative price structures.
Airtel announced two plans with data tariffs effectively lower by an eye-catching '80%'. Bharti Airtel Ltd, Idea Cellular Ltd and Reliance Communications Ltd lost a combined Rs.13,165.55 crore in market value. all Telcos will be forced to change their business model, revenue model and the network in use.

I will include telecom companies in oligopoly market structure because Oligopoly is a market structure in which a small number of firms has the large majority of market share. An oligopoly is similar to a monopoly, except that rather than one firm, two or more firms dominate the mark.

They use market penetration as a pricing strategy, aim to attract buyers by offering lower prices on goods and services. Many new companies use this technique to draw attention away from their competition.



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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Ashishhh on Tue Sep 20, 2016 6:47 pm

RJIO's entry with disruptive plans of free data, free voice calls and roaming possibly the world's cheapest plans will push other Telecom operators to the fringes, if not exit altogether. It could also possibly trigger consolidation among the existing mobile telecom players, Jio has also prompted the mobile makers to produce more 4g handsets at lower costs. addressable market for 4G currently is around 7 per cent of India's mobile users and do not expect high end users to shift immediately
It is an oligopolistic market that is dominated by only a few large firms compete in various other ways, such as advertising, product differentiation and barriers.
I think it's an example of PENETRATING PRICING. Because jio has set the prices which are lower than any other operator I.e. 50/gb and free calls n roaming now.
RJio has disrupted industry pricing more than we imagined Bharti Airtel to Rs 290 from Rs 335, and that on Idea Cellular to Rs 85 from Rs 100.
Airtel may cut data prices by 25% in 2016 as a result of Reliance Jio launching services, a report said.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by yashica arora on Tue Sep 20, 2016 6:48 pm

Experts believe Jio’s tariff offer of unlimited voice calls bundled with multiple data buckets will compel incumbents to cut call charges for retaining mid- to high-end average revenue per user generating customers and securing their voice business. It expects the weaker revenue growth for No.1 Bharti Airtel and third ranked Idea to lead to 7 per cent and 10 per cent cuts in earnings before interest, tax and 10 per cent and 65 percent cut in earnings per share, respectively. Bank of America- also expects the biggest incumbent operators to respond selectively with tariff cuts to prevent their subscribers from moving to Jio. Incumbents have been trying various data-pricing strategies to retain top-end users and have already cut effective rates. As the voice business plateaus, they have turned to pricier data services for growth and ramped up 3G/4G presence. Bharti Airtel and Vodafone India recently offered unlimited voice calls on high-value post-paid packs to retain higher revenue paying customers ahead of Jio’s launch. The two, along with Idea, have also slashed effective data prices by nearly 70 per cent on some plans. However, it’s not only incumbents that will have to deal with uncertainty. The going is unlikely to be easy for Jio and the shareholders of Reliance Industries Ltd (RIL) either. Aggressive pricing means that break-even will get delayed. On the launch day, RIL’s share price also dropped by close to 3%. Clearly, shareholders of existing operators are not the only worried lot. Jio is a huge diversification and its success will be critical for RIL and its shareholders. In my opinion I will place Telecom companies like Airtel, Idea,Jio etc. In monopolistic competition as there are few sellers in the market and buyers have huge choice of what to buy, difference being only the prices offered by different companies.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by Ankur Parwal on Tue Sep 20, 2016 7:06 pm

Yes, In my opinion Reliance Jio's aggressive pricing impact incumbent operators (like Bharti Airtel, Vodafone and Idea) profitability and sustainability.Because reliance jio is giving affordable & simple tariff like No voice call charges(both STD & Local),No roaming charges,No high data charges,No blackout days. Jio also has announced free voice calls across network and data charges that are 30-50% lower than that charged by incumbents including Vodafone and Airtel. These disruptive changes would create pressure on incumbents on multiple fronts.
Experts believe Jio’s tariff offer of unlimited voice calls bundled with multiple data buckets will compel incumbents to cut call charges for retaining mid- to high-end average revenue per user generating customers and securing their voice business. It expects the weaker revenue growth for No.1 Bharti Airtel and third ranked Idea to lead to 7 per cent and 10 per cent cuts in earnings before interest, tax and 10 per cent and 65 percent cut in earnings per share, respectively. Bank of America- also expects the biggest incumbent operators to respond selectively with tariff cuts to prevent their subscribers from moving to Jio. Incumbents have been trying various data-pricing strategies to retain top-end users and have already cut effective rates. As the voice business plateaus, they have turned to pricier data services for growth and ramped up 3G/4G presence. Bharti Airtel and Vodafone India recently offered unlimited voice calls on high-value post-paid packs to retain higher revenue paying customers ahead of Jio’s launch. The two, along with Idea, have also slashed effective data prices by nearly 70 per cent on some plans. However, it’s not only incumbents that will have to deal with uncertainty. The going is unlikely to be easy for Jio and the shareholders of Reliance Industries Ltd (RIL) either. Aggressive pricing means that break-even will get delayed. On the launch day, RIL’s share price also dropped by close to 3%. Clearly, shareholders of existing operators are not the only worried lot. Jio is a huge diversification and its success will be critical for RIL and its shareholders. In my opinion I will place Telecom companies like Airtel, Idea,Jio etc.
I would place telecom companies like Bharti Airtel,IDEA, Vodafone in Monopolistic Competition as:
No. of firms=Many
Elasticity of demand=Highly Elastic
Product Differentiation=High
In monopolistic competition as there are few sellers in the market and buyers have huge choice of what to buy, difference being only the prices offered by different companies.
Pricing strategy used by Reliance Jio’s strategy is "PENETRATION PRICING" (In penetration pricing lowest price for the new product is charged. This helps in prompt sales and keeping the competitors away from the market.)RJio has disrupted industry pricing more than we imagined Bharti Airtel to Rs 290 from Rs 335, and that on Idea Cellular to Rs 85 from Rs 100.
Airtel may cut data prices by 25% in 2016 as a result of Reliance Jio launching services, a report said.
The industry has been trying various data pricing strategies, with Bharti Airtel, Vodafone and Idea trying innovative price structures.
Airtel announced two plans with data tariffs effectively lower by an eye-catching '80%'. Bharti Airtel Ltd, Idea Cellular Ltd and Reliance Communications Ltd lost a combined Rs.13,165.55 crore in market value. all Telcos will be forced to change their business model, revenue model and the network in use.
"The telecoms sector is currently reeling under financial stress, high debt burden and slowdown in revenue growth. Further decline in data tariffs may impact operators' profitability and sustainability,"

The spectre of price war is back in the telecom space, with industry insiders and analysts predicting Bharti AirtelBSE 0.17 %, Vodafone and Idea CellularBSE -0.18 % to slash their rates to respond to the enticing tariffs that Reliance Jio Infocomm is offering.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by ankitsharma on Tue Sep 20, 2016 7:12 pm

YES, I believe the R-Jio launch has the potential to disrupt mobile data tariffs,I think there is a high likelihood that the entry of R-Jio will also expand the size of the market significantly, which could benefit Bharti Airtel and Idea Cellular. If data demand accelerates, we could see positive delta to revenues, margins and returns, which could lead to a re-rating for Airtel and Idea. Bharti Infratel also benefits in a data-boom scenario as the firm is well positioned as the tower provider of choice to market leaders. We believe the entry of R-Jio could see some weaker participants such as R-Com, Aircel, Tata DoCoMo and Telenor fail. We believe India’s telcos have a tremendous opportunity in data: data revenue has already grown 5-6x over the past 12 quarters for Airtel and Idea. We expect this trend to accelerate with the launch of R-Jio. We believe both Airtel and Idea are well positioned to benefit from this potential data boom. Infratel offers a low beta option on potential strong growth in India’s data market.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by sonali gupta on Tue Sep 20, 2016 7:15 pm

Yes,Relaince Jio has made a great impact on other telecom sectors(Bharti,Airtel,Vodafone and Idea) profitability and sustainbility because Reliance Jio is giving affordable & simple tariff like No voice call charges(both STD & Local),No roaming charges,No high data charges,No blackout days. Jio also has announced free voice calls across network and data charges that are 30-50% lower than that charged by incumbents including Vodafone and Airtel. These disruptive changes would create pressure on incumbents on multiple fronts.

Due to reliance jio the shares of other telecom service provider has lower down and if reliance merge with the Aircel then its total revenue will become 26000 crore in which 15000 crore will be of reliance and 11000 crore will be of Aircel. This merge will have a very great impact on the other telecom service provider in which Airtel will occur a great loss.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by rakshita jain on Tue Sep 20, 2016 7:27 pm

Yes i am agrre with the statement,reliance gio's aggressive pricing impact incumbent operators (like Bharti Airtel, Vodafone and Idea) profitability and sustainability.In an age where people are mostly connected to each other over internet, Reliance Jio offers huge benefits to its customers with unbelievably low prices. Ever since Mukesh Ambani made the announcement of offering unlimited 4G LTE data for 3 months on trial basis, other telecos have cut their 3G/4G data rates by up to 80 percent.We looked at the plans offered by existing telecom operators to check how the plans offered by Jio stack with competition. This analysis is purely on the amount of 4G data offered by the telecom operators as the common parameter.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

Post by SWATI SRIVASTAVA on Tue Sep 20, 2016 7:29 pm

Yes the entry of Reliance Jio will have a great impact on incumbent operators as it is providing absolutely free Voice, Text, 4G data and Jio digital app access for all users till December 2016 under the Jio welcome offer. Airtel , Idea and Vodafone, all have been experimenting with various bundles and data pricing strategies in order to combat the Reliance Jio effect.
In my opinion, these telecom industries are placed in monopolistic competition because there are many sellers in the market selling differentiated products even though they serve a similar purpose.
They are charging low price to increase its sales and capture market share.

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Re: Will Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability or would it change the paradigms for the telecom sector. Comment.

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