Meanwhile, those at Jefferies believe RJio's primary focus is still on gaining subscribers, which dampens expectations of tariff hikes going ahead. That said, Bharti has been able to retain subscribers over time.
Since their launch in 2017, JioPhones have gained only a 22 per cent market share despite being sold at a 40 per cent discount to the average selling price of feature-phones in India, reports suggest. In the voice segment, analysts at Jefferies said, Bharti's unlimited voice plan costs twice RJio's cheapest Rs 75 plan. Besides, Bharti's limited voice plans are offered at lower price points of Rs 49-79.
“Despite the steep tariff premium, Bharti has retained subscribers due to its offerings at lower price points and no requirement for a device change. Jio's new plans might not entice existing 2G users on Rs 49 plan, but they could drive churn among feature-phone users changing their device,” wrote Akshat Agarwal and Ankur Pant of Jefferies in a February 28 note.
Paying the upfront amount demanded by RJio now will be another challenge as the subscribers being targeted by the company had already purchased JioPhones in the past two years when the upfront cost was cut to Rs 699 from Rs 1,500.
“The higher upfront payment required for the bundled device offer may be a key deterrent for the customer segment being targeted by JioPhone incrementally, even as it provides a meaningfully attractive value proposition in terms of unlimited voice and reasonable quota of high-speed data covering basic requirements on a superior 4G device compared to the feature phones in use,” said Tarun Lakhotia and Aniket Sethi of Kotak Institutional Equities in a March 01 note.
Among the lot, analysts still remain bullish on the road ahead for Bharti Airtel
and have a buy / hold rating on the stock with a 12-month target price ranging between Rs 600 - Rs 713, indicating an upside between 13 per cent - 35 per cent from the current levels.
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