One of the mistakes that Bharti Airtel learnt from the last price-war (per sec billing in 2009) was Airtel had to cut tariffs across segments, which impacted the tariffs of all subs ? even the ones not impacted/targeted by competition. Post that, Bharti Airtel has made investments in analytics by which it can selectively target a sub-segment.
Post the Jio launch, we note that the segment that will be most vulnerable is the high-end segment. Bharti is in a position to respond in this segment by match-pricing only on 4G and not seeing any cuts in 2G/3G tariffs. We see the risk of a high competitive scenario around 6-9 months post Jio launch, as Jio may get aggressive once it realizes that the initial uptake is lower than its expectations. In our view, this is because the high-end market size is not large enough to help Jio meet its targeted sub base of 100mn.
