Reliance Jio's new mass-connect plan to further hurt incumbents

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The stocks of Bharti Airtel and Idea Cellular were down around 4% in early trade on Wednesday after Reliance Jio indicated that it would cut tariffs by about 25% as part of a new Republic Day offer.

These plans have validity of 84 and 91 days, respectively. Meanwhile Jio also introduces a new Rs 98 tariff, which offers 1GB of data per day along with free voice calls and messages. It had made revisions to some of its prepaid plans earlier this month, slashing their prices by Rs.50 and offering additional data. On the other hand, the Airtel plan offers 1GB of data per day.

Due to the increasing competition, incumbent operators had announced their own plans to take on Reliance Jio's Happy New Year 2018 plans.

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Jio entered India's highly-competitive telecom market in late 2016 and disrupted the space with free-voice and cut-price data plans, forcing rivals to match its tariffs and dragging their margins lower. Conversely, Airtels recent plans included Rs. 149 prepaid plan that has been revised in fewer circles. Other benefits like unlimited calls and daily 100 SMS remain the same. Similarly, 1.5GB per day plan users can use 2GB High speed data. Reliance Jio users who recharge with Rs 448 will get a total of 168GB data, compared to 126GB now. Now, after the revision, the plan will offer 1.5GB daily data with the same 84 days validity.

Clearly, if we look at the plans, Airtel is offering a tough fight to Jio. The plan now offers extra data and extra validity. The validity of 349 plan of Airtel is 28 days. So customers will now get more data with the Rs. 198, Rs. 398, Rs. 448 and Rs. 498 plans.

Jio company said in a release that these changes will surely bring the Jio supremacy in tariff plans and also ensures their Prime customer's users that they will always get the best tariffs in the industry. For instance, Jio's flagship Rs 399 plan will now provide free voice, unlimited data (1.5GB daily), unlimited SMS and premium subscription to Jio Apps for 84 days. Rest of the benefits are same to all unlimited plans of Airtel.

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