Airtel launches Prepaid on Postpaid to help business users get additional data benefits
Airtel launches Prepaid on Postpaid to help business users get additional data benefitsReuters

After the launch of Reliance Jio services in December this year, Bharti Airtel may reduce its data tariffs by 25% in the next fiscal year, according to a global brokerage firm.

"In our model for Bharti, we assume a price cut of 25 per cent in FY17E as a result of Jio's launch. However, we assume that increased consumption will offset the impact of price cuts on revenues," said Goldman Sachs in a report.

In July, an ET report said Reliance Jio may offer data plans at a third of "current market rates", when it rolls out 4G services in December, this year.

"Jio is likely to offer 1GB at close to Rs 60," an industry executive familiar with Jio's plans had said.

Currently, the telecom operators are charging 1 GB of data in the range of Rs 150 to Rs 200. Reliance Jio plans to take on fierce competition with aggressive pricing of its data plans.

However, Goldman Sachs said that a reduction in data prices is likely to result in more data usage by the consumers, offsetting the impact of price cuts.

The brokerage said that Airtel's huge subscriber base will help the company to increase "network operational expenditure" as against the new entrants.

"We expect Bharti to continue outspending incumbents on non-spectrum capex leading to a further increase in network capacity," NDTV Profit quoted Goldman Sachs as saying.

The report said India's largest telecom operator, Bharti Airtel, has considerably boosted its spectrum capacity after the auctions in March. Airtel's total spectrum rose by 31% to 947 MHz across all the circles.

"Between FY15-FY21E, we estimate the revenue market share (Airtel's) to rise further to 31.2 per cent (despite Reliance Jio's launch) due to better spectrum than peers and lead in launching LTE," it added.

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