Tariff War Continues

The tariff war in the telecom sector refuses to subside. Jio upped the game recently for older telcos by launching a Rs 49 plan for JioPhone, the telco's low-cost feature phone. The plan offers unlimited voice calling and 28 gigabytes of data over 28 days. In retaliation, Airtel and Vodafone are offering 1.4 GBs of data per day - and unlimited calls - for Rs 199 and Rs 198 per month, respectively. Just when everyone was expecting Jio to mellow down after an aggressive start, it has done exactly the opposite. Jio's no-holds-barred fierceness has started to unsettle more than just telcos.

In a recent report, Kotak Institutional Equities noted that "even as the company's [Jio's] actions are suggestive of a drive to domination and willingness to be as aggressive? our challenge is to figure out what level of domination Jio is seeking to achieve this makes Bharti's fair valuation a more-than-tricky exercise limits our ability to figure out a reasonable basis to value Bharti and Idea."

Manu Kaushik