India’s Reliance Jio has raised its prepaid mobile prices 20%, following similar moves by Bharti Airtel and Vodafone Idea last week.
The hike has basically restored Jio's price discount compared to Bharti in terms of one prepaid plan. However, the company did not raise prices for the other four types of plans it offers.
It should be noted, however, that prepaid is extremely popular in India, constituting almost 95% of the total Indian market.
The analysts at Jefferies, led by Akshat Agarwal, were optimistic about the effects of the price hike on the one prepaid plan. They see it as a positive that all three main carriers have raised prices. At the same time, Jio can still attract new users because of the discount in comparison to the other carriers’ plans.
“Reliance Jio's tariff hikes have brought its discount back to 13-21% vs. Bharti in the prepaid smartphone segment,” wrote Jefferies. “This should keep Jio's subscriber momentum intact. With most Jio phone tariffs unchanged, Jio's subscriber traction should remain strong. Jio's willingness to increase smartphone tariffs bodes well for Bharti/Jio's longer-term revenue/margin outlook.”
RELATED: India’s Airtel, Vodafone Idea hike prepaid prices by 20-25%
Jio’s price hike goes into effect December 1.
Jio has been grabbing market share in India ever since its inception as a company, with its super cheap discounts on LTE service. But many industry experts have said such low tariffs in India are not sustainable for any of the country’s mobile operators.
BT rumors
In other news, an article in The Economic Times today indicated that Reliance Jio's parent company was mulling a bid for the U.K.’s BT Group. The article stated that Reliance Industries might make an unsolicited offer to buy into BT Group or try to get a controlling share in it. The article added that Reliance may also propose to partner with BT's fiber arm, Openreach, and fund its expansion plans.
But Reliance Industries quickly smacked down that story.
“We categorically deny any intent to bid for the U.K. telecoms group, BT, formerly British Telecom,” wrote Reliance Industries in a brief announcement. “The article is completely speculative and baseless.”