Can Reliance’s Jio Bharat 4G Phone v2 Hurt Airtel And Vi?

The launch of Jio Bharat, an affordable 4G phone by Reliance Jio, is expected to have an impact on the Indian mobile phone market and the major telecom operators, including Bharti Airtel and Vi (Vodafone Idea).

Jio Bharat is aimed at capturing a significant portion of the remaining 250 million 2G feature phone users in India.

Analysts have differing opinions on the extent of the impact on Bharti Airtel, one of the leading telecom operators in India.

Some believe that Jio Bharat could disrupt the lower end of the market, potentially leading to increased churn from Airtel’s recent 2G price hikes.

However, others suggest that Airtel’s position may not be significantly affected due to factors such as customer loyalty, better offerings from Airtel in the past, and limited direct impact on Airtel’s revenue from feature phone customers.

Vodafone Idea (Vi), which also has a significant number of 2G subscribers, may experience an impact on its mobile revenue and EBITDA if a substantial portion of its 2G users switch to Jio Bharat.

Analysts estimate that the shift of 40% of Vi’s 2G users to Jio Bharat could potentially impact its revenue and EBITDA by 11% and 19% respectively.

The launch of Jio Bharat is expected to delay the discussion on tariff hikes in the market, which may have a negative impact on Vi, as it is struggling with financial challenges. However, the overall impact on Bharti Airtel and the telecom sector as a whole is likely to be almost nothing.

Jio Bharat’s pricing, features, and exclusivity to Jio services may limit its appeal to certain segments of the market.

Existing feature phone users may not find strong reasons to switch to Jio Bharat, considering factors such as loyalty to their current providers, previous aggressive offers from Jio, and limited benefits for heavy data users. Additionally, the initial target of Jio Bharat is relatively small compared to India’s customer base and industry sales.

Jio Bharat’s launch is expected to attract some customers in the lower-end segment like senior citizens, less-educated people, students etc.

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But the impact on Bharti Airtel, Vi, and the overall mobile phone market may be limited. There are several reasons for that such as customer loyalty, better offerings from competitors, and the less features of Jio Bharat itself.