Adrian Mowat, JP Morgan: Continue to believe Reliance Jio difficult investment decision

    . “India is by far the largest overweight amongst emerging markets this week,” he added.

    Stating that market cap of telecom is very low in India, Adrian Mowat, Chief Emerging Market & Asian Equity Strategist, JP Morgan on Thursday said he continues to believe that Reliance Jio is a difficult investment decision. Talking about global markets with CNBC TV 18 he said, “Indian market’s move is in-line with the global equity markets. We should be conscious about risks tagged to Trump administration. We need to be little more cautious about global markets”. “India is by far the largest overweight amongst emerging markets this week,” he added.

    Reliance Jio made some big announcements on February 21, which may result in the further loss of user base for incumbents Airtel, Vodafone, Idea and others. At the same time, since the Happy New Year offer by Jio will end on March 31, the rival companies will have a chance to lure in consumers by providing them with competitive tariffs. Since the freebies will be over now, Jio has announced a new plan called the ‘Jio Prime’ where consumers will be able to get similar services by paying nominal prices. If you are a Reliance Jio subscriber, you will have to pay Rs 99 for a year, where you can get 1GB of data for free each day at a monthly charge of Rs 303. In a way, 30GB data for that price is exceptionally low when compared with other network providers. This simply suggests that Jio has planned to draw top customers of Airtel, Vodafone and Idea, most of whom already use Jio as a secondary SIM.

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    Earlier today, in further consolidation in the Indian telecom sector post the entry of Reliance Jio with its free voice and data services, Bharti Airtel said that it will acquire rival Telenor India to further augment its customer base and network. As part of the agreement, Airtel – India’s largest telecom service provider – will acquire Telenor India’s operations in seven circles, namely Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam, it said. “These circles represent a high population concentration and therefore offer a high potential for growth,” Airtel added.

    Talking about the pricing, Dipen Sheth, Head, HDFC Securities said, “Bharti was holding out little pieces of 1GB and 2GB data a month for what it was claiming were attractive prices, and Jio comes and says I’ll give you 1GB a day. So, the pricing is completely wrong, but it’s disruptive.”

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