Jio postpaid plans: Airtel, Vi may start offering Netflix subscription to counter threat

With Reliance Jio foraying into the postpaid segment in a big way, challenging the strong presence of incumbents Bharti Airtel and Vodafone Idea, it is the customers who are going to be the biggest beneficiaries once again.

Since Jio’s postpaid plans offer more content options and data than both Bharti and Vodafone Idea (Vi) across price points — its comparable offerings have been priced at a 20% discount to Bharti Airtel’s — incumbents are sure to beef up their content and data offerings to hold on to their higher Arpu (average realisation per user) customers.

Reliance Jio, which earlier had only one postpaid plan (Rs 199 per month) on Tuesday unveiled plans starting from Rs 399 going up to Rs 1,499. All the plans come bundled with Netflix (mobile-only, single-device plan), Amazon Prime, Disney-Hotstar and Jio TV/ Saavn/ Cinema. All the plans offer unlimited voice and data ranges between 75 GB and 300 GB per month.

Netflix and Amazon Prime subscriptions are co-terminous with the plans, whereas in the comparable plans of Airtel and Vi, not only is the data offering less, there is no Netflix or Disney-Hotstar subscription. In case of Amazon Prime, the two incumbent players offer subscription only for a year.

Jio’s entry plan is Rs 100 cheaper than Bharti’s — in fact, if one adds the free monthly subscription of mobile-only Netflix which otherwise costs Rs 199, the price gap widens to around Rs 300.

Vi’s plan is priced at the same Rs 399, but offers lower data — 40 GB compared with Jio’s 75 GB.
Amazon Prime and Disney Hotstar VIP cost Rs 999 and Rs 399 per annum, respectively, on a standalone basis.

The postpaid market is worth around Rs 22,000 crore in revenues and forms 15% of the sector’s revenues and 5% of its active subscribers, according to Jefferies estimates.

Around 50-60% of these subscribers are enterprise customers, and 34% of postpaid subscribers are situated in the three metros and another 36% in urban centric A-circles. Among operators, Vodafone Idea has the highest 43% market share followed by Airtel at 28%.

Analysts maintain that in case of Bharti, it’s the 40% postpaid users who are not enterprise customers who could be open to moving to Jio in case Bharti does not match its offering with that of Jio’s. Enterprise customers are generally not very price-sensitive but focus more on quality and network issues. Postpaid forms 5% of Airtel’s subscribers and 16% of its India mobile revenues.

Since Vodafone Idea is facing network quality issues, it faces an even bigger threat from Jio’s postpaid offerings and could see a high churn.