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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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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 7:35 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 himanshu goyal on Tue Sep 20, 2016 7:42 pm

yes, i agree with Reliance JIO aggressive pricing will impact operators (vodafone, airtel, idea) 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. according to me jio is molopoly market in india which attracts large number of buyers with single sellers.Reliance Jio's pricing is definitely attacking on competitors price.

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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 angelina samuel on Tue Sep 20, 2016 7:48 pm

The launch of reliance Jio is likely to transform the Indian telecom sector, but at the same time, put pressure on multiple fronts on the present telecom operators such as Airtel, BSNL, Vodafone, Idea etc. The company announced always free voice call and lower data tariffs.
As a result, Vodafone India is also offering free calls but within its network for a limited period and also double the data for consumers subscribing to data for 1Gb or more in its 4G network. Similarly Bharti Airtel announced two plans with data tariffs effectively lower by 80%.
Telecom analysts used the term as 'Knock out punch', 'disruptive' to describe to describe Reliance Jio's aggressive tariff plan. Reliance Jio will force the country's top operators to rethink their tariff plans.

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Will Reliance Jio's aggressive pricing impact incumbent operators (like Bharti Airtel, Vodafone and Idea) profitability and sustainability.

Post by Komal Khanna PGFA1623 on Tue Sep 20, 2016 7:54 pm

Jio is a Mumbai-based provider of 4G internet and broadband services in India. Jio provides 4G services on a pan-India level. On September 5, 2016, Jio launched its 4G services. Jio's plans are more focused on the mass market than that of incumbents. At Rs 149 the company is offering 300 MB of data and unlimited local and roaming voice free and access to Jio entertainment apps. The company does not plan to charge for SMS either.
Yes, we see an adverse impact for incumbents. Incumbents have been trying various data-pricing strategies to retain top-end users and have already cut effective rates. Former Airtel CEO Sanjay Kapoor said Jio's entry will impact margins of telcos by 3-4%, making it that much more difficult to raise funds. At the same time, they will have to spend money not just in bidding for airwaves but also in upgrading their networks. If Vodafone and Idea want to be in the market for a long term, then they will have to go out and buy more 4G spectrum.
The long term impact of Jio will depend upon for how long will it maintain its low tariffs and service quality, because now people are going crazy by just seeing the offers but after January what will happen we will see.
As of now the competitors are worried about their position in the market. Initially, it is a yes that other operators are facing a challenge but we will see this at a later stage what happens in future.

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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 Rishabh verma on Tue Sep 20, 2016 8:18 pm

From my point of view, there is an imperfect competition which is going on between the telecom companies and the market structure is “OLIGOPOLY”. Pricing policy adopted by RELIANCE JIO is “PENETRATION PRICING POLICY.” On the other hand, reliance jio’s aggressive pricing policy will surely impact incumbent operators like bharti aritel, Vodafone and idea on their profitability and sustainability and at the same time it will change the paradigms of the telecom sector, rather I would say that it had taken the telecom sector into the new era by introducing a new type of network which is a 4G network which gives an astonishing speed over the internet. This new, better and improved network will surely help our country to grow as in today’s fast moving world internet is a necessity for all.
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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 Vartika Shukla on Tue Sep 20, 2016 8:26 pm

According to me it has imperfect competition type of competition in the market. Reliance has oligopoly type of market structure. Mr. Ambani  being an inner Steve jobs  released such a market strategy by launching JIO 4G sim.   The announcements themselves were surprising: free voice calls, cheap 4G data rates, dirt-cheap 4G devices and the promise of unrestricted Internet access. In Filmy line we can say the HALLA boll in the market. India has  always been the poor connectivity and data scarcity. They are data services at cheaper prices but it has effected market badly because due to this company other companies are getting effected badly and there importance are going down the vein. RELIANCE being one of the oldest and top companies in India is creating it place by engraving there jio system. According to me its not good because it just seems to be free available profitable tariff plan but its not so , as the former app of jio has every power in our cell phones then only the other  related things will work with that app. The company is getting the full data of every person getting that sim registered with them. In the press conference the was raised that if they genuinely want to provide free data services and tariff plan should provide there sim in normal telecom stores why is only reliance store  providing the sim?
Its because they want to acquire the telecom market in a wrong way just to get monopoly in 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 Varshita Rathore on Tue Sep 20, 2016 8:40 pm

Reliance Jio's aggressive pricing impact and its various other features provided to the market has definitely incumbent profitability and sustainability of other operators like Bharti Airtel, Vodafone and Idea.
It is an Imperfect Competition going on between the telecom companies. It is an Oligopoly Market as it comprises few firms, large number of buyers and heterogeneous products. Action on one firm will effect the rival firms. So, every firm keeps a close watch on the activities of rival firms.
Reliance Jio has adopted the PENETRATION PRICING STRATEGY. It means the industry charge minimum price for its new product. It is commercially viable because it attracts the market at the same time as well as helps in promoting sales and have an edge over its competition.
It has also changed the paradigms for the telecom sector.
With the entry of Reliance Jio market is introduced with high speed internet and various other features like affordable and simple tariff services. It has caused huge impact over other operators in telecom industry on their profitability and sustainability. As a result it has attracted the market share the most.

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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 Shubham Mathur on Tue Sep 20, 2016 8:42 pm

Yes, It would impact incumbent operators '(Bharti,Airtel,Vodafone and idea) profitability and sustainability as Reliance Jio shareholders's wealth gained ₹20,000 crore in the past last two weeks as the markets gradually factored in the contribution of telecom venture towards the company 's valuation and the stock recouped its position as the second most valued Indian company by market capitalization. Jio 's 'Welcome offer', which gives free service until December 2016, is adding as high as 5 lakh subscriber per day.If current subscriber ,additions sustain, it will have a good chance to bring sizable subscribers at the end of free service period and may surpass the street expectatin of 2.5 crore subscribers by FY 17- end before time.It will definitely reduce the profitability of other operator's company. On to the question of sustainability, due to low pricing of jio, other operators also reduce their prices . For example, Airtel has slashed 4G and 3G mobile internet charges by up to 80 per cent to as low as Rs 51 per gigabyte (GB) under a special scheme.To avail this benefit, Airtel customers will have to recharge with Rs 1,498 against which they will get 1GB of 4G or 3G mobile internet usage valid for 28 days. At present, Airtel offers 1GB of 3G or 4G mobile internet for Rs 259 valid for 28 days.I must say, It would change the paradigms for the telecom sector.




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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 Aarya Gupta on Tue Sep 20, 2016 8:49 pm

According to me, Reliance Jio’s aggressive pricing will impact incumbent operators’ profitability and sustainability. This strategy by reliance surely created a huge competition in the market as they provided the JIO 4G sim with free voice calls, cheap data rates due to which the other telecom sectors have gone under losses and thereby the companies are going through imperfect competition(oligopoly), wherein their are few sellers and large number of buyers and the control over pricing is with the sellers. Jio has adopted Penetration Pricing Policy in which prices are initially set low in order to attract the consumers to the new brand which would surely result into profitability at initial stages.

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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 shubham gupta on Tue Sep 20, 2016 8:55 pm

Yes, JIO is affecting the market share and profitability of other telecom companies. Reliance Jio's aggressive pricing impact operators (like Bharti Airtel, Vodafone and Idea) profitability and sustainability. Jio has filed its tariff plans with Telecom Regulatory Authority of India (Trai), promising free voice calls and mobile Internet. Attractive offers like No voice call charges(both STD & Local),No roaming charges,No high data charges are providing by reliance. 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. I would place the telecom companies like airtel, idea, etc in monopolistic competition as there are few sellers, large number of buyers and products can be differentiated but we cannot predict any situation in long run as it can be positive or negative.

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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 sonakshi chadha on Tue Sep 20, 2016 9:02 pm

Yes, Reliance Jio's aggressive pricing will impact and is impacting its other competitors in the telecom sector. Reliance Jio is giving a tough time through its different strategies and prices which is attracting the consumers and making them shift from their existing service providers to Jio. The services provided by Jio like giving 4G free for 3 months and voice calls and roaming free for lifetime is affecting other service providers. Jio would start charging from its customers from 1 January, 2017. These policies are forcing other service providers like Airtel, Vodafone, Idea,etc to revise their prices and lower them to still remain as a competitor in the market. As due to the coming up Jio, people are getting more attracted towards it and switching from their service providers. To sustain in the market the other service providers only have one option at this point of time to revise their policies and prices and retain its customers.

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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 Ritika on Tue Sep 20, 2016 9:22 pm

Yes, In my point of view it will definitely effect the profit and the stability of the other companies like (vodafone, BSNL, Idea, etc) because jio has came into the market with the very attractive and different offer. It took a very great strategy in the market for the company's profit and it is becoming really very popular among all the customers.The reason behind its popularity is its price as it is available in the market at a very cheap price so there is no competition in the market now.At the end of the accounting year there will be almost 100 billion users of reliance jio.The competition will begin when the other competitors will take another strategy in price to attract customer.

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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 Aastha Ahlawat on Tue Sep 20, 2016 9:23 pm

OK, first of all it was a big shoot by Ambani's. In my point of view nothing is free in today's world,reliance offering Jio sim with free calls and data and now obviously this already impacted on other telecom operators such as Vodafone and idea. Reliance strategy was to boom in the market and attract customers and they did perfectly.This thing will not last long even after some time the things in telecom remains same as before or after December even the things will be same like Jio is changing and effecting the telecom companies and sector right now but it would not be able to do so long.Even it is a kind of oligopoly as some firms are also offering the same after reliance till the offer ends.After December reliance will recover this loss to increase the call rates and data packages.So, this is it and this kind of strategy is important for every company to be in market at good position.Lastly I think it would not able to change the paradigms of telecom because they are not offering free calls and data till life long.This is a offer for limited time which can effect the market for particular time  only.


Last edited by Aastha Ahlawat on Fri Sep 23, 2016 7:11 pm; edited 1 time in total

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RELIANCE JIO...

Post by Sakshi Taneja on Tue Sep 20, 2016 10:22 pm

RELIANCE JIO

Jio is a Mumbai-based provider of 4G internet, mobile telephony, broadband services, and digital services in India.


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.

Effect of this major step:
This is a strong move as it is having an effect on the telecom sector as a whole.
It will compel incumbents to cut call charges or else they might loose customers.
It expects the weaker revenue growth for No.1 Bharti Airtel and third ranked Idea .

however, we don't expect incumbents to match Jio on voice tariffs, and expect some pressure on their voice revenues.

Entry with disruptive offers of free voice calls, roaming and possibly the world's cheapest data plans will push smaller mobile service providers such as Aircel, Telenor India and Reliance Communications to the fringes, if not to exit altogether.

Mukesh Ambani-owned Jio's management is counting on its introductory offer of free calls and data to grab a 100 million customers rapidly.


NATURE OF INDIAN TELECOM INDUSTRY
:
The nature of economic structure of mobile telecom industry in India can be described as an OLIGOPOLY.
Defination of oligopoly:
Oligopoly can be defined as a market structure with a small number of large players also called as Oligopolists. These large players have a significant share of the total market size. Immense competition is concentrated within these competitors. The other competitors are small and have a minor market share.
BUT till the time reliance Jio changes its policy may be by this december, it is enjoying MONOPOLY in the telecom sector.
Jio will put an end to voice call charges in India
if we talk about commercial viability,yes it has reduced 90%of price but at the cost of data bcz this leaves Reliance Jio with just one option for charging subscribes and that is for data.

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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 harshitadaga on Tue Sep 20, 2016 10:42 pm

According to me, telecom companies in India can come under the Oligopoly Competition.
In an oligopoly market, two or more firms dominate the market. There is no precise upper limit to the number of firms in an oligopoly. However, the action of the firms affect and influence each other. This definition perfectly complies to the scenario of Indian market of the telecom companies wherein, the number of firms are limited and have a high influence of each other. If one company launches a new scheme, the other has to get ready with its own scheme to offer to the customers.
Therefore, I believe JIO's aggressive pricing is going to have an impact on the competitors. This is because even though the companies like airtel and vodafone have a brand loyalty towards them, the cheap pricing will bring about a wind of change and people will start turning towards reliance.
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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 preeti tamrayat on Tue Sep 20, 2016 10:53 pm

Free voice is key to making Reliance Jio's integrated plans much more compelling cost-wise than those of peers. Reliance Chairman Mukesh Ambani took the wraps off the Jio network  by offering free calls and rock-bottom data prices that sent shares of established players into a nosedive on fears of an all-out price war. Providing Free 4G data, Text, Voice, etc are there strategy to attract the public and to build more and more users.
With Reliance Jio’s commercial launch, incumbent telecom operators Airtel, Vodafone and Idea Cellular have cut data tariffs and are offering free calls to drive market adoption. Telecom operators have been trying various data pricing strategies, with Bharti Airtel, Vodafone and Idea Cellular trying innovative price structures.So with the entry of Jio it brings a drastic change in Telecom sector and put impact on other networks too.

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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 kshipra on Tue Sep 20, 2016 11:08 pm

While Bharti Airtel reported an increase of 89% in net profit for the quarter ending March 31, Idea Cellular clocked 91% jump in its earnings.
On the other hand, Mukesh Ambani's Reliance Jio has accelerated efforts to roll out its 4G services across the country. It has finalised key vendor and supplier partnerships and is making rapid progress in building critical infrastructure needed to launch the services.
"Telecom operators have been increasing tariffs to an extent that once Reliance Jio comes up they are able to pull back the prices depending on the competition that will be created,"
"However whether Reliance Jio's entry would affect the market by dragging it back to the tariff war days would largely depend on how they enter into the market. Voice war is a thing of the past, it is all going to be about data."
Infotel was the only player to bag pan-India licence when the Broadband Wireless Access (BWA) spectrum auction that facilitates 4G services took place in 2010. Its competitors Bharti Airtel bagged spectrum in four circles, Aircel in eight, Qualcomm in four, Tikona in five while Augure in one.
While Reliance Industries bought Infotel post the auctions, Bharti Airtel bought 100% stake in Qualcomm spectrum in 2013.
Thereafter, in the recently held auctions of 1800 MHz spectrum many companies such as Idea Cellular and Vodafone participated and are now in the fray to launch their 4G services as the spectrum that was put on offer was technology neutral.
While Idea has said it will launch 4G services in eight of its key revenue markets where it acquired fresh spectrum without specifying any details, Vodafone too has acquired enough spectrum to roll out 4G services.
Talking about Reliance Jio's aggressive market strategics affecting the business of the incumbents, "Airtel and Idea are established players with millions of users. It is difficult for another player to just enter and impact the market instantly. Everyone aspires to make money and thus unreasonable tariff wars should not be seen."
"The incumbents are fighting within themselves for a larger share of the pie. It is not that easy for a new operator to add value customers by just giving discounts and freebies. They (Reliance Jio) will get customers initially, but it wont help them in the long run. They too need to have quality customers therefore instead of getting unnecessarily aggressive they are expected to be calculative."
"They are launching on a very new technology that has not even evolved. If they will make a mistake,others will surely take advantage of it.
Therefore I bilieve that Reliance Jio’s aggressive pricing will impact incumbent operators profitability and sustainability and it will change paradigms for the telecom sector.

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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 Kunwar Kartikay on Wed Sep 21, 2016 12:22 am

Yes,According to me Reliance Jio's pricing impact incumbent operators (like Bharti Airtel, Vodafone and Idea) profitability and sustainability.Reliance Jio has disrupted industry pricing more than one can imagined, with consequences for incumbents likely more difficult than expected.Reliance jio is badly affecting the other telecom companies as:

1.)It is giving competition to rivals.
(Bharti Airtel’s market cap plunged by nearly Rs 12,000 crore while smaller competitor Idea Cellular’s market value dipped by a cool Rs 3,000 crore.)
2.)Also its low rate tariff plans affect the incumbent operators.
[like No voice call charges(for STD & Local),No roaming charges,No high data charges]

The type of competition going on between telecom companies is Monopolistic Competition as their is:
Product differentiation.
Many firms.
No entry and exit cost in the long run.
Independent decision making.
Some degree of market power.

Pricing strategy used by Reliance Jio’s is "PENETRATION PRICING" (Here lowest price is charged for the new product).



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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 shivran on Wed Sep 21, 2016 3:07 am

Yes, i genuinely feels that JIO aggressive pricing will impact other operator’s (Bharti,Airtel,Idea & Vodafone) profitability and sustainability as Reliance have launched their fastest internet with cheaper price now everyone wants reliance JIO, they are really not caring about how much losses they are facing, all they want to do is grow a large number of audience. It’s a huge storm in telecom sector and reliance JIO is clearly a winner at this point of time, it’s changing the paradigms of telecom sector because they are attracting large number of buyers with single sellers. basically they are charging low price to increase their sales n growth their market shares n areas and because of Reliance JIO ‘s Drastic changes in rates, the share of other telecom service providers went down and they are bearing a huge loss. now Reliance is planning to merge with the Aircel and this will change telecom sector’s current scenario completely.
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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 Himani Banga on Wed Sep 21, 2016 9:21 am

Yes, Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability as reliance came with jio with fastest internet and voice calls at cheaper rates. It has also changed the paradigm for telecom sector as with low price strategy they are attracting more and more customers and also influencing mobile makers to produce more and more mobile phones which are 4G supportable.
Stiff competition is going between telecom companies. I will place this in oligopoly market because in this market small number of firms has large majority of share. This market consist of large buyers with few sellers and differentiated product. I think indian telecom industry fulfil all these conditions.
Reliance jio has adopted penetration pricing as they are charging lowest price for their new product for the purpose of promotion and increasing sale although they incur huge 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 Rishabh verma on Wed Sep 21, 2016 11:50 am

Ritu kanojia wrote: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,,,


Not Agree with it

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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 Saurabh khandelwal on Wed Sep 21, 2016 12:06 pm

Yes Mam, I am agree with this statement that in present time reliance jio is affecting the profitability and sustainability of other major telecom operators or we can say that on its competitors but I think this impact is only for few time. At which level I can think about jio's stretegy, they are trying to make jio as habit of people and once it become habit they will increase the cost and again the market will be stable. At present time, jio stands in monopolistic type of market because there is a huge competition but there is some differentiation in product.

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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 kirti sharma on Wed Sep 21, 2016 4:12 pm


According to me, yes reliance jio aggressive pricing will impact incumbent operators like Bharti Airtel, Vodafone and idea because the network of jio is very fast and the calling is free for lifetime .by this the paradigm has also changed for telecom sectors because the price is very very low and because of this more customers are attracting towards this. This is a type of oligopoly market because in this there are small number of firms which has large majority of share. This market has large buyers with few sellers and having differentiated product.

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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 Sankalp on Wed Sep 21, 2016 6:08 pm

YES, I also feel that Reliance Jio's aggressive pricing impact operator’s (Bharti,Airtel,Idea & Vodafone) profitability and sustainability ,As reliance jio is providing everything in free, the way they have come up with these mind blowing offers . this is really a planned market strategies by Reliance JIO. Reliance Jio also has announced free voice calls across network and data charges. These disruptive changes would affect other operator’s shares n market. it’s changing the paradigms of telecom sector because they are attracting a very huge number of people n it’s very effective, they are so high in market in current situation and every customer wants JIO is in his hand. So it’s a Revolutionary product. So as the demand is higher, they aren’t able to supply adequate services and conclusion is that they are facing lots of conflicts in activation and other procedures required

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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 kshitiz agrawal on Wed Sep 21, 2016 6:31 pm

The entry of Reliance Jio may have led to the biggest disruption in the Indian telecom landscape. But, consumers are all set to gain as telcos may be forced to decrease tariffs to retain their market share. Free voice calls, low data usage charges, lucrative schemes for students – Mukesh Ambani’s Reliance Industries had something for everyone at the launch announcement of its much awaited Reliance Jio. Scroll through to find out everything you need to know about the Reliance Jio 4G launch. Stocks of Bharti Airtel, Idea Cellular and Reliance Communication came under pressure after Reliance Industries. 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. It is an Oligopoly Market as it comprises few firms, large number of buyers and heterogeneous products. Action on one firm will effect the rival firms. So, every firm keeps a close watch on the activities of rival firms.
Reliance Jio has adopted the PENETRATION PRICING STRATEGY. It means the industry charge minimum price for its new product. It is commercially viable because it attracts the market at the same time as well as helps in promoting sales and have an edge over its 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.

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