Jio has 280m subscribers, we estimate that c.65m are likely on JioPhones. Assuming an Arpu of Rs137 for smartphone users, the average Arpu of its JioPhone user could be Rs102, which is 11% higher than sector Arpus, implying that high-Arpu feature-phone subscribers are taking up JioPhones. This could be the reason for decline in Arpus that Bharti Airtel/Vodafone Idea have seen in B & C circles.
Jio management highlighted that it does not see any reason to cut tariffs given the strong ramp up in market share it has seen. We see this as a positive for the sector, as stability in tariffs over the past two quarters and adoption of bundled data plans have already resulted in stable sector revenues and in fact 3-16% growth in revenues of metro and A-circles (53% of sector revenues).
