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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Jaipuria Jaipur Discussion Forum :: Jaipuria Jaipur Discussion Forum-PGDM Term I & IV :: Managerial Economics (ME )
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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.
Yes, reliance will have a great impact on the incumbent operators as effectively by opting for reliance Jio plans , the average monthly bill for a mid to high and subscriber could come down by 50% to 60 %. Jio is disruptive due to voice being made free and a reduction in data prices. The disruptive changes would create on the incumbents on multiple fronts.
plans have been cleverly designed to first increase adoption then migrating to high plans. From pricing and strategy point of view ,it looks like the loss of market share to reliance Jio is imminent for the current operators.
The decline in prices could accelerate the decline in data realization by 8-10 quarters.
Reliance Jio's entry is likely to expand mobile data revenue pie. The 4G addressable market is currently around 5 percent of India's mobile users.The weakness in the share prices of airtel and idea offers an excellent opportunity to investors. Telecom is a capital intensive industry and with heavy debt on balance sheet of most telecom operators wherein reliance jio is planning to win customers by offering data plans which are cheapest , not just in India but in the entire world.
plans have been cleverly designed to first increase adoption then migrating to high plans. From pricing and strategy point of view ,it looks like the loss of market share to reliance Jio is imminent for the current operators.
The decline in prices could accelerate the decline in data realization by 8-10 quarters.
Reliance Jio's entry is likely to expand mobile data revenue pie. The 4G addressable market is currently around 5 percent of India's mobile users.The weakness in the share prices of airtel and idea offers an excellent opportunity to investors. Telecom is a capital intensive industry and with heavy debt on balance sheet of most telecom operators wherein reliance jio is planning to win customers by offering data plans which are cheapest , not just in India but in the entire world.
Neha Choudhary- Posts : 11
Join date : 2016-08-04
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.
I agree that R-Jio aggressive pricing will impact incumbent operators' profitability and sustainability as shares of Bharti Airtel, Idea Cellular and Reliance Communications saw their share prices dip.This will put pressure on both the revenue growth and profitability of existing operators. But the other side ,they will not only be forced to relook at their tariff structures and customer-retention strategies but may also bid more aggressively in the forthcoming spectrum auctions, especially in high revenue-generating circles, where they have limited capacity and spectrum to offer 4G services. The correction is already happening- Airtel and Idea reduced voice tariffs by 8-10 percent over 2015.
and as it is the 1st lap of R-Jio lets see what next innovation can come from the competitors.It has already changed the paradigms of the telecom industry as Reliance has initiated to change the platform to more of Digital providing free 4G leading customers inclining towards VIRTUAL platforms and far-reaching concepts like e-governance, e-learning and e-healthcare-all buzzword services that were lost in implementation, largely because of the slow adoption of digital technology-are now expected to blossom.
Jio has already offered the highest earnest money deposit (EMD), indicative of its plans for the upcoming auctions. It means the company is eligible to bid in any of the country’s 22 telecom circles and in any spectrum band. It is also the first time that the 700 Mhz band—considered the best for 4G operations—is being auctioned. And Jio, with the highest EMD, is the only company with the potential to buy spectrum at a base price in most of the circles.so the competition among them is really tough n taking a toll on each operator.
i would consider it in a monopolistic competition with many sellers with differentiated output of product with its price even tough serving a similar purpose.
The pricing are very low to capture maximum market share n to increase sales.
and as it is the 1st lap of R-Jio lets see what next innovation can come from the competitors.It has already changed the paradigms of the telecom industry as Reliance has initiated to change the platform to more of Digital providing free 4G leading customers inclining towards VIRTUAL platforms and far-reaching concepts like e-governance, e-learning and e-healthcare-all buzzword services that were lost in implementation, largely because of the slow adoption of digital technology-are now expected to blossom.
Jio has already offered the highest earnest money deposit (EMD), indicative of its plans for the upcoming auctions. It means the company is eligible to bid in any of the country’s 22 telecom circles and in any spectrum band. It is also the first time that the 700 Mhz band—considered the best for 4G operations—is being auctioned. And Jio, with the highest EMD, is the only company with the potential to buy spectrum at a base price in most of the circles.so the competition among them is really tough n taking a toll on each operator.
i would consider it in a monopolistic competition with many sellers with differentiated output of product with its price even tough serving a similar purpose.
The pricing are very low to capture maximum market share n to increase sales.
yashika_damani- Posts : 12
Join date : 2016-08-06
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.
I agree that R-Jio aggressive pricing will impact incumbent operators' profitability and sustainability as shares of Bharti Airtel, Idea Cellular and Reliance Communications saw their share prices dip.This will put pressure on both the revenue growth and profitability of existing operators. But the other side ,they will not only be forced to relook at their tariff structures and customer-retention strategies but may also bid more aggressively in the forthcoming spectrum auctions, especially in high revenue-generating circles, where they have limited capacity and spectrum to offer 4G services. The correction is already happening- Airtel and Idea reduced voice tariffs by 8-10 percent over 2015.
and as it is the 1st lap of R-Jio lets see what next innovation can come from the competitors.It has already changed the paradigms of the telecom industry as Reliance has initiated to change the platform to more of Digital providing free 4G leading customers inclining towards VIRTUAL platforms and far-reaching concepts like e-governance, e-learning and e-healthcare-all buzzword services that were lost in implementation, largely because of the slow adoption of digital technology-are now expected to blossom.
Jio has already offered the highest earnest money deposit (EMD), indicative of its plans for the upcoming auctions. It means the company is eligible to bid in any of the country’s 22 telecom circles and in any spectrum band. It is also the first time that the 700 Mhz band—considered the best for 4G operations—is being auctioned. And Jio, with the highest EMD, is the only company with the potential to buy spectrum at a base price in most of the circles.so the competition among them is really tough n taking a toll on each operator.
i would consider it in a monopolistic competition with many sellers with differentiated output of product with its price even tough serving a similar purpose.
The pricing are very low to capture maximum market share n to increase sales.
and as it is the 1st lap of R-Jio lets see what next innovation can come from the competitors.It has already changed the paradigms of the telecom industry as Reliance has initiated to change the platform to more of Digital providing free 4G leading customers inclining towards VIRTUAL platforms and far-reaching concepts like e-governance, e-learning and e-healthcare-all buzzword services that were lost in implementation, largely because of the slow adoption of digital technology-are now expected to blossom.
Jio has already offered the highest earnest money deposit (EMD), indicative of its plans for the upcoming auctions. It means the company is eligible to bid in any of the country’s 22 telecom circles and in any spectrum band. It is also the first time that the 700 Mhz band—considered the best for 4G operations—is being auctioned. And Jio, with the highest EMD, is the only company with the potential to buy spectrum at a base price in most of the circles.so the competition among them is really tough n taking a toll on each operator.
i would consider it in a monopolistic competition with many sellers with differentiated output of product with its price even tough serving a similar purpose.
The pricing are very low to capture maximum market share n to increase sales.
yashika_damani- Posts : 12
Join date : 2016-08-06
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.
Yes, Reliance Jio's aggressive pricing impact incumbent operators' (Bharti Airtel, Vodafone and Idea) profitability and sustainability as they are providing free voice calls and data pack at cheaper rate as compared to other operators. so basically they are trying to grab the market by providing more features and at cheaper rate and they are quite successful in doing so.
According to me telecom is a monopolistic market as there are large no. of sellers and large no. of buyers with same product but somewhat differentiated and Reliance JIO is attracting more and more customers by lowering the price.
According to me telecom is a monopolistic market as there are large no. of sellers and large no. of buyers with same product but somewhat differentiated and Reliance JIO is attracting more and more customers by lowering the price.
Neetu Singhal- Posts : 11
Join date : 2016-07-27
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.
yes according to me jio's aggressive policy will impact other operators. as we know that jio has come up in the market with such a great offers and cheap schemes like free call etc, it has impacted market on a huge level.Due to reliance jio the shares of other telecom service provider has lower down ans they are facing the tough competition. this aggressive policy of jio is forcing other companies to revise their prices and to make their policy more strong in order to sustain in market.
Shreekant- Posts : 7
Join date : 2016-08-06
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.
Reliance Jio infocomm kicks off its 4g services , shaking up the industry with free dirt cheat data , which top rivals Bharti Airtel Vodafone and idea will be forced to react to, draining there finances Mukesh Ambani owned jio management is counting on its introductory offers of free calls and data to grab a 100 million customers rapidly. Ambani had said that 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. Bharti Airtel and Vodafone India recently offered unlimited voice calls on high value postpaid packs to retain higher revenue paying customers a head of jio launch. The two,along with idea have also slashed effective data prices by nearly 70 percent on some plans.
SHWETA KHANDAL- Posts : 12
Join date : 2016-08-04
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