Idea, Airtel Share Prices Drop as Jio Announces it Will Match Their Best Selling Plans
Halfway through Mukesh Ambani’s speech at a tech industry conference the share prices of Airtel and Idea started dropping. The stocks were reacting to the news that Jio would match their best-selling plans and offer 20% more data for the same price.
Reliance Industries Chairperson and Managing Director Mukesh Ambani making speech. (Image: TV Grab/CNN-News18)
New Delhi: Halfway through Mukesh Ambani’s speech at a tech industry conference the share prices of Airtel and Idea started dropping.
The stocks were reacting to the news that Jio would match their best-selling plans and offer 20% more data for the same price.
Idea Cellular Ltd gained to 108.45 rupees at 2:05 pm and then lost 0.9% to 107.5 rupees before rebounding. Bharti Airtel Ltd shares dropped from 370.05 rupees a piece to 360.85 rupees, a 2.5% drop.
Before Mukesh Ambani’s speech, the share prices of the two companies, which are competitors of Jio in the data market, rose on expectations of an announcement regarding tariffs. The 4G data service has been free of charge since its launch on September 5.
The other piece of news that probably caused brokers to sell Idea and Bharti shares was Ambani’s appeal to customers to port their numbers to Jio from other networks.
“Lakhs of customers have used mobile number portability to move to Jio and this trend is increasing,” Ambani said. “MNP is becoming simpler with an aadhar based process and I hope more customers will opt for MNP and make Jio their permanent home.”
Analysts have pointed out that many customers prefer to use Jio for Data services while relying on other networks for voice calls. The statements by Ambani are seen as a sign that Jio wants customers to use its 4G network for both purposes.
In order to facilitate this, Jio has decided to keep voice calls free on its 4G LTE network even after April 1, when it finally starts charging for services. It has also thrown in an offer called Jio Prime to induce more customers to sign up before April 1 on attractive terms.
This is the second time that competitors share prices have eroded in value as a result of Jio’s offers. On September 1 last year the market capitalization of both companies declined by 12,000 crores after Mukesh Ambani, the Chairman of Reliance Industries Ltd, announced the launch of Jio.
Airtel lost Rs 9,800 crore and Idea’s M-Cap shrunk by 2,450 crore.
Since then the 4G data market has seen fierce competition and consolidation as companies sought to defend their turf against the newcomer. Airtel and Idea have both posted losses while Vodafone’s India unit has opened merger talks with Idea in order to consolidate the position of both companies.
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