Rs 199 Reliance Jio offer impact: Bharti Airtel share price tanks 6%, Idea Cellular hits 52-week low
Idea Cellular share price fell as much as 8.4 per cent to its 52-week low of Rs 53.45, while Bharti Airtel declined 5.8 per cent to Rs 388.30 on the BSE
Reliance Jio offer impact: Bharti Airtel, Idea Cellular share prices tanked up to 8 per cent after their rival Reliance Jio Infocomm unveiled a new post-paid plan at almost half the price and with more data than those offered by Airtel, Idea or for that matter the non-listed telco Vodafone.
Reacting to the news, Idea Cellular share price fell as much as 8.4 per cent to its 52-week low of Rs 53.45, while Bharti Airtel declined 5.8 per cent to Rs 388.30 on the BSE.
Reliance Jio, the telecom arm of Reliance Industries, introduced an unlimited domestic post-paid plan for Rs 199 and international calling at Rs 0.50 per minute on Thursday.
Reliance Jio's entry into the telecom sector over an year ago had set off a brutal tariff war among operators as they drastically cut prices to compete with Jio's bottomed-out plans.
For the top three big telecom operators in India, post-paid users make up only 7 per cent of the total subscribers, but contribute more than 20 per cent to their revenues, said global brokerage Jefferies in a research note.
Airtel and Idea are expected to launch new plans in response to Jio's offer and thus see a further decline in their average revenue per user, Jefferies added.
Any 10 per cent cut in post-paid prices will lead to an EBITDA decline of 12 per cent and 6 per cent for Idea and Airtel respectively, the global brokerage said.