Rjio, which began operations in 2016, has emerged as the largest operator due to aggressive marketing and attractive low cost plans. However, less than 1 per cent of its 398 million plus subscribers are in the postpaid segment. In contrast, Airtel and Vi ( Vodafone Idea) have 5.2 and 7.2 per cent of their customers in the postpaid category. CLICK HERE TO READ FULL REPORT
The new operator’s postpaid plans announcement, while at similar tariff levels of incumbents (except for base tariff that is 20 per cent cheaper than Airtel’s offering), largely have the benefits of three major OTT (Netflix basic, Amazon Prime, Hotstar VIP) subscription as key attraction apart from offers such family packs and international roaming. The postpaid base of Airtel, VIL were at 14.6 million, 21.5 million, as on Q1FY21, respectively.
“A large chunk (more than two-thirds) of postpaid category in our view, is driven by corporate connections in India (more sticky and mutual terms based). Thus, the response of non-corporate segment will be key to the churn,” ICICI Securities said in a note.
We see the offering as having the potential to drive at least some churn from incumbents, unless they match the OTT offers. Matching of the offering, on the other hand, could result in additional annual costs to Airtel and Vodafone Idea.
The announcement, however, puts VIL in a spot, as it would have to weather churn through cost increase, the brokerage firm said.
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