Jio’s value proposition strong despite charge: Merrill Lynch
Mumbai: Investment management company Merrill Lynch on Wednesday said Jio may continue its growth momentum as it remains the cheapest offering despite charging 6p for off-net calls.
Merrill Lynch expects the subscriber momentum to slowdown in FY21-22 but expect average revenue per use (ARPU) improvement on back of tariff hike.
“We believe its value proposition to the consumer remains strong in terms of approx. 20 per cent cheaper tariffs and better coverage. Incrementally we expect the growth to come more from the mid-to-low end subs in the process diluting the overall ARPU,” Merrill Lynch said.
Besides it said that Vodafone faces the risks of further market share loss before its integration with Idea networks completes and hence Jio is well placed to “capitalise on the mid-to-low end subs”.
Merrill Lynch also expects Jio to bid for 700 MHz/3.5 GHz spectrum and be a first mover in 5G rollout in India. “However, the timing of 5G rollout would likely be after we see scale picking up in China 5G as it would lead to lower handset prices and give visibility on B2B applications,” it added.