Airtel, Vodafone Idea News: Shares of both telcos suffered heavy losses on Wednesday
Shares of Bharti Airtel and Vodafone Idea (VI) suffered heavy losses on Wednesday, a day after rival telco Reliance Jio Infocomm announced the launch of postpaid plans. Bharti Airtel shares fell as much as 7.97 percent to Rs 433.50 each on the BSE, having started the session slightly lower at Rs 470 from their previous close of Rs 471.05. Vodafone Idea shares fell 8.78 percent to trade at Rs 9.35 on the exchange at the weakest level of the day, after opening almost unchanged at Rs 10.20.
On Tuesday, Reliance Jio Infocomm, the telecommunications arm of Reliance Industries, launched postpaid plans starting at Rs 399 a month. Jio offers subscription to Netflix, Amazon Prime, and Disney Plus Hotastar under its postpaid plans with no additional fee, among other benefits.
At 1:50 pm, Bharti Airtel was trading 7.73% lower at Rs 434.65 and Vodafone Idea was down 9.07% at Rs 9.32, well below the benchmark S&P BSE Sensex index, which fell 0.88%.
The S&P BSE Telecom Index, which tracks 10 stocks in the telecommunications sector, was down 6.95 percent at the time, after falling as much as 8.01 percent earlier.
Reliance Industries shares were trading 0.16 percent higher at the time, having risen as much as 2.96 percent to Rs 2,276.50 apiece earlier, a day after the conglomerate announced a Rs 5,550 crore investment of KKR & Co Inc, based in the United States, in its retail division. Reliance Retail Ventures.
“Jio has renewed its postpaid game plan with the launch of new plans under which it offers a broad portfolio of content at a rate that is between 6% and 20% cheaper than Bharti and VI. In the past , Jio has tried to capture the postpaid market with aggressive pricing, while consumer rigidity and lack of content offerings prevented it from achieving notable gains, “Emkay Global Financial Services said in a note.
“This time, however, extremely aggressive content offerings could be the key draw for consumers. Jio has priced its basic plan (Rs 399 per month) at a 20% discount to Bharti along with the apps. over-the-top (OTT), “he added.
Reliance Industries’ telecommunications unit, Reliance Jio infocomm, had 392.7 million subscribers in May since its launch in late 2016. Vodafone Idea lost a fifth of its wireless customers last year and had 309.9 million subscribers in May.
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