Jio’s new offer dampens tariff hike talk, adds to Vodafone Idea’s worries

Reliance Jio’s two-year discounted offer has dampened expectations of a tariff hike in the telecom space and has added to the woes of Vodafone Idea (Vi), which is looking to reduce subscriber loss and raise funds, analysts said. The new offer will also slow the recovery in average revenue per user (ARPU) of telecom companies, they said.

On Friday, Jio launched a new bundled offer giving customers a handset, two years of unlimited calls, and two GB data per month for Rs 1,999. A one-year plan with similar benefits will be made available for Rs 1499.

In a note, analysts at Jefferies said Jio’s primary focus is still on gaining subscribers, which dampens expectations of tariff hikes. In case of sharp underperformance, Jio will likely resort to tariff tweaks. It would not have cut tariff if its low-cost smartphone was to be launched in the near term, Jefferies analysts Akshat Agarwal and Ankur Pant said.