Jio Effect: Indian Mobile Sector Revenues Declining

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The annual revenue of Indian telecom firms declined for the first time since 2008-09 to Rs 1.88 trillion in 2016-17 (from Rs1.93 trillion the previous year), and will decline further to Rs 1.84 trillion in 2017-18, brokerage CLSA said in a report released on 7 April.

Reason for decline

The launch and aggressive pricing of Mukesh Ambani-promoted Reliance Jio Infocomm Ltd which has forced other telecom firms to cut prices. The revenue of telecom firms is expected to recover to Rs1.87 trillion in 2018-19, marginally higher than that seen in 2014-15, the brokerage added. Jio Withdrawing Summer Surprise Offer: All You Need To Know

Comment by CLSA analysts

"Indian mobile sector revenues are declining, triggered by tariff wars between Reliance Jio and incumbents. Although Trai (the telecom regulator) has ended Jio's latest free ‘Summer Surprise' offer, subscribers who had already opted for the offer will still get its benefits, and incumbents' latest offers will still dilute industry ARPU (average revenue per user) at the upper end of subscribers," CLSA analysts Deepti Chaturvedi and Akshat Agarwal said in the report, reports Livemint. What Is Jio Summer Surprise Offer? All You Need To Know

Trai regulations

Telecom regulator Trai ordered Mukesh Ambani-led Reliance Jio to withdraw the three-month complimentary offer of unlimited data usage and free calls on payment of a minimum Rs 303. Jio in response to this announced that i is withdrawing the three months complimentary benefits of Jio Summer Surprise offer.

Mergers in telecom sector

India's largest telecom operator Bharti Airtel announced the acquisition of Norwegian Telenor's India unit. Vodafone and Idea have already announced the merging of businesses in India. By this merger, they would create the biggest telecom operator in the country. Anil Ambani-led Reliance Communications has already signed a pact to merge its wireless business with Aircel. '5 Major Telecos Optimum For Indian Market'

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Read more about: jio, airtel, idea
Story first published: Tuesday, April 11, 2017, 13:51 [IST]
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