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With General Elections Nearing, Mobile Tariff May Not Rise

Mobile tariffs for subscribers are not expected to increase with general elections coming next year in May, according to a report by Bank of America Merill Lynch released Tuesday.

The analyst report of Bank Of America Merill Lynch (BoFA ML) said that it believes Mukesh Ambani-led Reliance Jio is unlikely to raise rates till it achieves a subscriber base of 400 million.

“We believe Jio is aiming for No. 1 position and unlikely to raise tariffs till it reaches 400 million subscribers. Furthermore with elections around April-May 2019, we do not expect any tariff hikes,” said the report by BoFA ML research analysts Sachin Salgaonkar and Sukriti Bansal.

According to the report, Jio estimates that for good quality fibre-to-home (FTTH) service market, 50 million customers would pay USD 20 or around Rs 1,400 per month over a period of time, while Bharti Airtel feels the market size in the segment is around 30 million and consumers could pay Rs 500 per month on an average.

The analysts felt that Jio will continue to dominate 4G segment for next 6-12 months which will be driven by its “network advantage and continued momentum in the 4G feature phone segment”.

The report said that Jio will be focussing on increasing the number of mobile towers from 2 lakh at present to 2.36 lakh in the next six months and 3.2 lakh over the next 12-18 months.

While Vodafone Idea in its result last week said that integration of their business is on expected line, BoFA ML claimed it to be otherwise which will give advantage to Jio and Airtel to gain market share.

Vodafone Idea leads with around 35 per cent market share in terms of number of subscribers. – Business Standard

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