Reliance Jio Ended the Streak of Profits for Incumbent Telecom Operators With Its Competitive Tariff Plans

The entire Indian telecom segment is baffled with the launch of Reliance Jio 4G services. What started as a ‘Welcome Offer’ is now converted to ‘Jio Dhan Dhana Dhan’ offer providing similar benefits to the consumers of India. However, with its aggressive moves and free 4G services, the Mukesh Ambani’s company has impacted the incumbent telecom firms revenue by a huge margin.

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According to a recent report from brokerage CLSA, the annual revenue of operators in India has declined by almost three to four percent to Rs. 1.88 trillion in FY 2016-17 from Rs. 1.93 trillion obtained in the FY 2015-16. It is also expected that the revenue will further deplete to Rs. 1.84 trillion in FY 2017-18. Furthermore, the report stated that the revenue would be settled at Rs. 1.87 trillion in FY 2018-19, which is almost equal to the revenues obtained in the FY 2014-15.

According to the data released by TRAI recently, the gross revenue for 11 telecom operators in the country is settled at Rs. 34,835 crores in the third quarter of FY 2016-17, which is almost down by 10 percent from the previous quarter revenues of Rs. 37,302 crores.

However, do make a note that both the CLSA brokerage report and TRAI data did not include the revenues of Reliance Jio as the new entrant just started charging its consumers.

According to TRAI, India’s leading telecom operator, Bharti Airtel saw its market share dip to 33 percent with almost 0.5 percent drop from the previous quarter. On the other hand, the consolidated firms Vodafone and Idea market share has seen a rise to 23.8 % and 20 % respectively.