Jio's Unlimited 5G Plans Put Airtel on Back Foot in India, Delay Profits: JP Morgan

The launch of cheaper postpaid plans with unlimited 5G by Reliance's Jio has put rival Bharti Airtel on the back foot in the Indian market and may delay recovery in its key profit metric, JP Morgan analysts said on Thursday.

Jio, the telecoms unit of Indian conglomerate Reliance Industries, launched new postpaid plans last week, starting from Rs. 399 ($4.85) that included over-the-top (OTT) packages, forcing Bharti Airtel to roll out similar plans.

"We were surprised to see Bharti turn defensive with counter-plans," JP Morgan analysts said in a client note, adding that unlimited 5G data consumption would also delay any kind of 5G monetisation, pressure the expansion of average revenue per user (ARPU) and delay 4G prepaid tariff increases.

Bharti's new family plans can drive ARPU drops of Rs. 100-200 per subscriber and any subsequent price matching to that of Jio can drive further ARPU drops of Rs. 50-100 per subscriber, the analysts said.

Stiff competition to attract 5G subscribers would reduce the pricing power for the operators and they will not be able to monetise 5G by charging a premium, they added.

Analysts kept their "under weight" rating on Bharti Airtel, saying that ARPU expansion for Bharti was at risk and could even reduce over 2024-25 as 5G price wars take place.

Both, Jio and Bharti Airtel have been rolling out 5G services across the country.

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