Mobile tariffs for subscribers are not expected to increase as general elections are coming by May next year, according to a report by Bank of America Merrill Lynch.
The analyst report of Bank Of America Merrill Lynch (BoFA ML) said that it believed Reliance Jio was unlikely to raise rates till it achieved a subscriber base of 400 million users.
"We believe Jio is aiming for [the] No. 1 position and unlikely to raise tariffs till it reaches 400 million subscribers. Furthermore, with elections around April-May 2019, we do not expect any tariff hikes," said the report by BoFA ML research analysts Sachin Salgaonkar and Sukriti Bansal.
According to the report, Jio estimates that for good-quality fibre-to-home (FTTH) service market, 50 million customers would pay $20 or around Rs 1,400 per month over a period of time, while Bharti Airtel feels the market size in the segment is around 30 million and consumers could pay Rs 500 per month on an average.
The analysts felt that Jio will continue to dominate the 4G segment for next 6-12 months, which will be driven by its "network advantage and continued momentum in the 4G feature phone segment".
The report said that Jio will be focussing on increasing the number of mobile towers from 2 lakh at present to 2.36 lakh in the next six months and 3.2 lakh over the next 12-18 months.
While Vodafone-Idea in its results last week said that integration of its business is on expected lines, BoFA ML claimed it to be otherwise, which will give advantage to Jio and Airtel to gain market share.
Vodafone-Idea leads with around 35 per cent market share in terms of number of subscribers.
