Airtel, Idea plunge up to 5% on data tug-of-war

NEW DELHI: Shares of telecom operators, including Bharti Airtel and Idea Cellular, took a beating on Wednesday as data war intensified after Reliance Jio introduced Republic Day 2018 offers for its customers.

The new offers included upgrading 1GB and 1.5 GB daily data packs to 1.5 GB and 2 GB, respectively.


"These plans have been launched as a response to Airtel's tariff changes," a company executive told ET. The new offers are effective January 26.

Brokerage Nomura India noted that the management of Reliance Jio (RJio) in a recent analyst meet emphasised that if incumbents neutralise RJio’s, “we will always offer more value” proposition across any of its offerings (tariff plans) and further tariff disruptions cannot be ruled out.

Bharti Airtel tumbled 6.51 per cent to settle at Rs 458.95 on the BSE. Idea Cellular fell 5.38 per cent to close at Rs 94.05.

Brokerage Edelweiss Securities noted that RJio’s usage metrics indicate significantly higher consumer engagement with 9.6 GB per month average data against Bharti's 5.3 GB in Q2 2017-18. Besides, Jio enjoyed 694 minutes average voice during the quarter compared with Bharti's 574 minutes.

Recently, Airtel announced that its subscribers will get 1.4 GB data per day if they recharge for Rs 199, Rs 448 and Rs 509. Those who recharge for Rs 349 will get 2.5GB data per day, compared with the 2 GB data earlier.

"RJio continues to add significant subscriber base despite high base and non-availability of Jiophone. It added 21 million (mn) subscribers versus 8.1 mn addition by Bharti, 6.3 mn by Idea and 5.1 mn by Vodafone. Importantly, churn for the company is at 1.4 per cent versus 3.4 per cent for Bharti," Edelweiss Securities said.

Idea cellular will report is December quarter numbers later in the day.

Brokerage firm Goldman Sachs, in its latest report, predicted that Idea could lose some market share in the near term as the operator's spend on capex remains significantly lower than Bharti and Jio.