iWorld
India Ratings and Research says R-Jio’s tariff hike to support industry ARPU
MUMBAI: India Ratings and Research (Fitch Group) believes Reliance Jio Infocomm Ltd’s (R-Jio; ‘IND AAA’/Stable) decision to start charging Rs 0.06/minute through top-up vouchers on outgoing voice calls to other networks would improve its average revenue per user (ARPU) by about Rs 9 and EBITDA by 15 per cent to 18 per cent in FY20, assuming that usage/calling pattern remains the same and the zero interconnect usage charge (IUC) regime is postponed beyond its scheduled date of 1 January 2020. However, the levy of additional charges by R-Jio will discourage users to call other operators from R-Jio, possibly leading to lower voice traffic on R-Jio network and hence could constrain the telecom giant’s actual EBITDA benefit at 8 per cent-10 per cent.
Also, Vodafone Idea Ltd (Voda-Idea; ‘IND A+’/Negative) and Bharti Airtel Ltd (Airtel) may see lower incoming calls on their network, which may impact their net interconnect user charge (IUC) income, which stood at 3 per cent and 10 per cent of total revenue for Airtel and Voda-Idea, respectively. Furthermore, Voda-Idea and Airtel may continue to lose their subscribers to R-Jio as the pricing arbitrage (i.e. outgoing voice calls to other network being free on R-Jio and chargeable for other operators) is removed. On the flipside, R-Jio’s tariff-hike may give Voda-Idea and Airtel an opportunity to increase their tariffs and repair their balance sheets. However, Ind-Ra believes the benefits for Voda-Idea and Airtel would be short-term and the marginal recovery of around 10 per cent in ARPU may not help in addressing the unsustainable debt levels, and improve credit metrics. Ind-Ra has maintained a negative outlook on the Indian telecom sector due to intense competition, elevated debt levels and continued reliance on capital infusion for debt servicing and capex.
Network Imbalance Higher for R-Jio: In Q1FY20, outgoing calls as a proportion of total offnet minutes of usage (MoU) for R-Jio, Voda-Idea and Airtel stood at 64 per cent, 41 per cent and 45 per cent, respectively. Also, of the total offnet voice traffic, net incoming MoU as a proportion of total offnet MoU stands at negative 29 per cent for R-Jio whereas the same is 9 per cent and 19 per cent for Airtel and Voda-Idea respectively, implying that network voice traffic imbalance is significantly higher for R-Jio compared with peers. Hence, R-Jio remains a net-payer of IUC expenses, whereas Voda-Idea and Airtel are net-receivers of IUC receipts. The move by R-Jio to start recovering IUC from customers would address R-Jio’s concerns that the zero IUC regime may get postponed by Telecom Regulatory Authority of India beyond its scheduled date of 1 January 2020.
Eventual Benefit Contingent on Many Variables: Estimating the impact of R-Jio’s levy of IUC charges on ARPU and EBITDA is tricky given that it may lead to a change in usage and calling pattern. The impact on Airtel and Voda-Idea’s financials is yet to be seen given that they have not yet announced their strategy in response to R-Jio’s move.
Broader Impact on Industry Tariffs: R-Jio’s tariffs have been 25 per cent-30 per cent lower than those of Voda-Idea and Airtel since the last two years, which has kept the competition intensity high. However, after falling steadily over the last 2.5 years, data tariffs (expressed in terms of GB per user per month) rose 11 per cent-17 per cent during October 2018-February 2019, and have been stable since then. Ind-Ra believes the industry-wide debt levels are at unsustainable levels and a marginal recovery of 10 per cent in ARPU may not help in improving the credit metrics. Telcos will continue to rely on external funding to support their debt servicing and elevated capex requirements. Any investment in spectrum acquisition or 5G technology may derail this fragile recovery.
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Estimation of Impact on IUC Changes |
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|
|
Bharti Airtel |
Voda-Idea |
R-Jio |
|
MoU (million minutes, total offnet and onnet) |
737,108 |
676,259 |
785,970 |
|
Outgoing calls ( per cent of offnet MoU) |
45 |
41 |
64 |
|
Incoming calls ( per cent of offnet MoU) |
55 |
59 |
36 |
|
Net incoming MoU ( per cent of offnet MoU) |
9 |
19 |
-29 |
|
Access charges – Net reporteda (INR million) |
2,500 |
3,800 |
-8,510 |
|
Offnet MoU as per cent of total MoU |
60.1 |
50.4 |
63.3 |
|
EBITDA (1QFY20, INR million)b |
84,926 |
36,500 |
46,700 |
|
IUC charges (as per cent of EBITDA) |
3 |
10 |
-18 |
|
a Access Charge data for Airtel taken from Bloomberg. |
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iWorld
Uber spotlights Rs 25 bike rides with music led IPL campaign
Uber uses 15 second music films with Divine and Roll Rida to push Rs 25 rides
MUMBAI: In a season where ads usually swing for sixes with celebrity spectacle, Uber has chosen to play a clever single sharp, fast, and straight to the point. Uber has rolled out a distinctly stripped-down IPL campaign, putting its product Uber Bike rides starting at Rs 25 for up to 3 km front and centre, rather than leaning on big-budget storytelling. The campaign features hip-hop artist Divine in Mumbai and Roll Rida in southern markets, using music as the primary vehicle for recall.
IPL advertising has long been dominated by high-production narratives packed with cricketers and film stars. Uber’s approach flips that playbook. Instead of elaborate storytelling, the brand opts for 15-second music-led films quick, rhythmic bursts designed to mirror the pace of urban mobility itself.
The message is deliberately simple, affordable, fast rides that cut through city traffic. No layered plots, no extended build-up just a functional promise delivered with cultural flair.
In the Mumbai-led film, Divine zips through traffic on an Uber Bike, turning the Rs 25 price point into a hook with his signature wordplay around “pachisi”. The campaign cleverly reframes affordability as a moment of delight, the kind that leaves commuters with a “32-teeth smile” after beating traffic at minimal cost.
Meanwhile, Roll Rida’s version leans into southern sensibilities, blending Telugu and Tamil influences with high-energy visuals. Set to the beat of tape drums, the film celebrates how low-cost rides can unlock a more connected and vibrant city experience. Together, the films reflect a conscious push towards regional authenticity, rather than a one-size-fits-all national narrative.
The campaign also signals Uber’s sharper focus on India’s growing bike taxi segment. While the company offers multi-modal services spanning cars, autos, metro integrations and intercity travel, this push zeroes in on two-wheelers as a key growth lever in dense urban markets.
By anchoring the campaign around a Rs 25 entry price for short distances, Uber is targeting everyday commuters, particularly younger users navigating congested cities where speed and cost matter more than comfort.
With IPL advertising clutter at its peak, even the most straightforward message risks getting lost. Uber’s answer is to embed the proposition within culture using music, regional nuance and repeat-friendly short formats to drive recall. The creative team has also layered subtle visual cues including multiple references to “25” within frames encouraging repeat viewing and reinforcing the core message without over-explaining it.
The campaign reflects a broader shift in advertising priorities. As attention spans shrink and media environments get noisier, brands are increasingly favouring clarity over complexity and speed over scale.
Uber’s IPL play may not shout the loudest, but it lands where it matters in the everyday commute. Because sometimes, in a marketplace full of grand narratives, a Rs 25 ride is story enough.
