Jio’s Freebies Have Caused A Loss Of 20 Per Cent To The Telecom Industry

Jio, whose populist plans have captured a large chunk of the customer base and imagination, has had another huge repercussion, with the Indian telecom industry losing one-fifth of its revenue.

The free calling and internet services offered by Jio have caused a 20 per cent loss to the industry, said a report by India Ratings and Research (Ind-Ra), while revising its outlook for the coming fiscal year for the sector to negative from stable-to-negative.

The report foresees a redistribution of the market share among existing players, as Mukesh Ambani’s latest venture had already captured a subscriber base of 72 million (7.2 Crore) by January this year. It also suggests that consolidations, like the recent proposed merger of Vodafone and Idea Cellular, and increased capacity and coverage for higher speed and virtual platforms are the way to go for the industry to gain hold of its pricing power, and retain its customer base.

Jio is expecting to have over 100 million users (10 crore) by March 2017.

Also read: Jio Entry Means Either Tatas Or Telenor May Need To Exit Telecoms— And Fast