{"id":10757,"date":"2018-05-11T11:37:45","date_gmt":"2018-05-11T11:37:45","guid":{"rendered":"http:\/\/dinnews.in\/?p=10757"},"modified":"2018-05-11T11:37:45","modified_gmt":"2018-05-11T11:37:45","slug":"bharti-airtel-idea-cellular-share-prices-plunge-today-on-jio-postpaid-announcement","status":"publish","type":"post","link":"https:\/\/dinnews.in\/?p=10757","title":{"rendered":"Bharti Airtel, Idea Cellular Share Prices Plunge Today On Jio Postpaid Announcement"},"content":{"rendered":"

Share prices of Bharti Airtel and Idea Cellular fell sharply today after\u00a0Reliance Jio Infocomm unveiled a new post-paid plan.<\/a>\u00a0Jio, the telecom arm of Reliance Industries, introduced an unlimited domestic post-paid plan for\u00a0Rs.<\/span>\u00a0199 and international calling starting at 50 paise per minute, starting 15 May. Under the Jio’s post-paid offering all services such as voice, internet, SMS, international calling will be pre-activated. Shares of Idea fell as much as 12.9 per cent to\u00a0Rs.<\/span>\u00a050.80 at day’s low while Bharti Airtel declined around 7.5 per cent. Reliance Jio’s entry into the telecoms sector has set off a brutal price war among operators as they drastically cut prices to compete with Jio’s aggressive plans.<\/p>\n

The Jio Rs199\/month rental (pre-service tax) postpaid plan comes with a 25 GB data allowance and unlimited domestic voice calls. The plan also comes with pre-activated ISD calling facility.<\/p>\n

For the top three big telecom operators in India, post-paid users make up only 7 percent of the total subscribers, but contribute more than 20 per cent to their revenues, said Jefferies.\u00a0Airtel and Idea are expected to launch new plans<\/a>\u00a0in response to Jio’s offer and thus see a further decline in their average revenue per user, Jefferies added.<\/p>\n

Any 10 per cent cut in post-paid prices will lead to an EBITDA or operating profit to decline of 12 per cent and 6 percent for Idea and Airtel respectively, added Jefferies.<\/p>\n

\u201cWhile\u00a0ISD outgoing<\/a>\u00a0is a very low proportion of industry\u2019s overall voice volumes (less than 0.1 per cent of outgoing volumes), we believe the contribution to industry revenues could be in the 1.5-2 per cent vicinity, Rs2000 crore to Rs3000 crore in absolute revenues.\u201d Kotak said in a note.<\/p>\n

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