Shares in Bharti Airtel and Vodafone Idea (VI) suffered sharp losses on Wednesday, a day after rival telecom company Reliance Jio Infocomm announced the launch of postpaid plans. Bharti Airtel shares fell as much as 7.97 per cent to Rs 433.50 apiece on the BSE, having started the session marginally lower at Rs 470 from their previous close of Rs 471.05. The Vodafone Idea stock tumbled 8.78 per cent to quote at Rs 9.35 on the bourse at the weakest level of the day, after opening nearly unchanged at Rs 10.20.
On Tuesday, Reliance Jio Infocomm - the telecom arm of Reliance Industries - launched postpaid plans starting at Rs 399 per month. Jio is offering subscription to Netflix, Amazon Prime and Disney Plus Hotastar under its postpaid plans at no additional tariff, among other benefits.
At 1:50 pm, Bharti Airtel traded 7.73 per cent lower at Rs 434.65 and Vodafone Idea was down 9.07 per cent at Rs 9.32, sharply underperforming the benchmark S&P BSE Sensex index, which was down 0.88 per cent.
The S&P BSE Telecom index - which tracks 10 stocks the telecommunications sector - was down 6.95 per cent at the time, having plummeted as much as 8.01 per cent earlier.
Reliance Industries shares traded 0.16 per cent higher at the time, having risen as much as 2.96 per cent to Rs 2,276.50 apiece earlier, a day after the conglomerate announced a Rs 5,550 crore investment from US-based KKR & Co Inc in its retail arm, Reliance Retail Ventures.
"Jio has renewed its postpaid game plan with the launch of new plans under which it is offering an extensive content portfolio at a rate which is around 6-20 per cent cheaper than Bharti and VI. In the past, Jio has tried to capture the postpaid market with aggressive pricing while consumer stickiness and a lack of content offerings prevented it from achieving any notable gains," Emkay Global Financial Services said in a note.
"However, this time, extremely aggressive content offerings could be the key attraction for consumers. Jio has priced its base plan (Rs 399 per month) at a 20 per cent discount to Bharti along with over-the-top (OTT) apps," it added.
Reliance Industries' telecom unit, Reliance Jio infocomm, had 392.7 million subscribers as of May since its launch in late 2016. Vodafone Idea lost a fifth of its wireless customers last year and had 309.9 million subscribers as of May.