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Reliance Jio Impact: In 2 Days, Idea Loses Rs 4,500 Crore In Market Value

By Oneindia Staff Writer

Shares of Bharti Airtel, Idea Cellular and Reliance Communications saw their share prices dip further on Friday, after analysts slashed price targets on some of them, and warned that the launch of new rival Reliance Industries' Jio venture is set to be much more disruptive than earlier imagined.

"Free voice is key to making Reliance Jio's integrated plans much more compelling cost-wise than those of peers," JPMorgan analyst Viju George said in a report.

Reliance Jio Impact: In 2 Days, Idea Loses Rs 4,500 Crore In Market Value

Reliance Chairman Mukesh Ambani took the wraps off the Jio network on Thursday by offering free calls and rock-bottom data prices that sent shares of established players into a nosedive on fears of an all-out price war.

"RJio has disrupted industry pricing more than we imagined, with consequences for incumbents likely more difficult than we expected," said George, who trimmed his price target on Bharti Airtel to Rs 290 from Rs 335, and that on Idea Cellular to Rs 85 from Rs 100.

Idea shares fell as much as 3.4 per cent today, after slumping 10.5 per cent yesterday. India's largest wireless player Airtel slid as much as 1.4 per cent at day's low today. The stock had slumped 6 per cent yesterday.

"We have been concerned over Jio's launch for a couple of years, and the event is turning out to be as negative as we had feared," Credit Suisse analyst Sunil Tirumalai wrote in a note.

Mr Tirumalai said he believed Jio's tariff structure, if it resonates with customers, could usher in the entry of bundled voice and data plans in the country.

At 11:01 a.m., shares of Idea Cellular were down 2.5 per cent, Bharti Airtel were off 0.2 per cent while Reliance Communication declined 1 per cent. In comparison, Nifty50 index was flat.

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